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Published: 25 October 2022

  1. Situations where punishment and deterrence would be relevant include (but are not limited to):
    • failure to keep certain records, (for example, where an employer destroys the records instead of retaining them)
    • deliberately impeding our investigations (for example, obstructing an inspector or continued non-compliance with other information-gathering powers)
    • misappropriation of assets, scams and other criminal offences where the behaviour is dishonest, wilful or fraudulent

Enforcement approach

  1. Some contravention of pensions legislation or conduct cannot be put right or remedied. In some instances, these may be ‘minor’ or may reveal that a person has complied with the spirit of the legislation but has inadvertently made a ‘technical’ or procedural mistake. When viewed in isolation these might not raise any significant concerns to justify enforcement action.
  2. However, where these contraventions are persistent, indicate intentional non-compliance or that a criminal offence has been committed, we may use our powers to punish and deter. In these circumstances remedy or restoration are not typically appropriate because the breach cannot be put right, so we may immediately pursue a financial penalty or start prosecution proceedings.
  3. Our prosecution powers are generally reserved for the most serious behaviour, in particular that which is dishonest, wilful or fraudulent. We aim to prosecute this type of behaviour to secure a more severe punishment and sanction for the person responsible, and to deter further offences by the person or others.
  4. Criminal conviction can, in some instances, lead to a custodial sentence, and it generally carries a greater stigma. It may have additional adverse consequences for businesses and individuals, such as disqualification from acting as a trustee if convicted of any offence involving dishonesty or deception. This is reflected in the fact that the criminal courts require offences to be proved beyond reasonable doubt, while we can use our regulatory and financial penalty powers if we are satisfied on the balance of probabilities.
  5. Deciding to prosecute is a serious matter. For prosecution to be an appropriate sanction, we must be satisfied that the evidence is sufficient, and that it is in the public interest. Each potential prosecution case is tested against the criteria set out in our prosecution policy. Where a criminal offence is successfully prosecuted the court decides on the fines and/or imprisonment.
  6. In some instances, the criminal courts have powers to recover assets or benefits obtained as a result of criminal activity through ancillary powers, such as confiscation and compensation orders under the Proceeds of Crime Act 2002, and we will explore those options when we successfully prosecute a person. We may also take criminal action in conjunction with regulatory or penalty proceedings to address certain breaches of pensions legislation and/or to secure recoveries for a scheme for the benefit of members.