Cases of suspected scams are the most common reason for The Pensions Regulator (TPR) using its section 72 power to demand information from companies or pension schemes.
A Freedom of Information (FoI) request, submitted by Professional Pensions, revealed that a plurality of the 625 section 72 requests for information related to suspected scams between April 2012 and June 2017. During this period, 281 of s72 issuances, or 45%, were made in this area.
This was closely followed by usage in avoidance cases, which saw 275 notices (44%) issued over since April 2012. In particular, TPR ramped up its usage of this power for avoidance reasons in 2016/17 when it sent out 121 notices of this type.
However, the majority of these related to its investigation into the collapse of British Home Stores (BHS) and the compounding effects on its pension schemes. Of the 121 notices relating to avoidance sent out last financial year, 102 related to BHS, while another 21 issued in 2015/16.
Overall, last year, the investigation into BHS represented 61% of all s72 notices issued by TPR.
However, if these numbers are removed from the overall total, suspected scams take a clear lead in TPR's usage of the power, representing 56% of the remaining 502 cases. Avoidance then trails with 275 cases, or 30% of the total.
The figures come on the back of TPR ramping up legal action against individuals failing to comply with s72 notices, including three successful criminal convictions earlier this year, and ongoing litigation against former BHS owner Dominic Chappell.
A spokesperson for TPR said it uses the "important" power in a wide range of investigations.
"Our section 72 power enabling us to request information plays an important role in our regulatory work," they said. "The two most common areas in which we use the power are anti-avoidance investigations and suspected scams, although more recently we have used the power in a much wider range of scenarios, including to support the work we are doing to ensure compliance with basic governance standards.
"We have been open about our intention to intervene more frequently and act faster, as part of our commitment to be a clearer, quicker and tougher regulator. Effective regulation is essential to protect the benefits of members of occupational pension schemes and we are using the powers available to us across our full remit.
"We will not tolerate non-compliance with section 72 notices and will consider prosecution of individuals or organisations that fail to co-operate with a request without a reasonable excuse."
The FoI response also revealed that the regulator used the power 34 times between April and June this year, with a plurality (47%) relating to suspected scams.
However, it has also used those powers for the first time in investigations around scheme return breaches, on two occasions. It also used the s72 power once in relation to governance standards, named ‘charge control', and once for an occasion where an application was made to TPR.
Although together these three areas make up just 12% of issuances this year, they demonstrate TPR's increased willingness to use the power, which also come with a warning that it "will not hesitate" to seek convictions where there is no compliance.
The regulator's use of s72 powers was previously condemned by Robin Ellison, who described the powers as part of a "21st century witch hunt", prompting compliance to turn from "strict into sensible".
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