PTL has been hit with a triple maximum fine for failing to meet new governance standards. Sara Benwell finds out more

When the Pensions Regulator issued a statement in June warning that schemes which failed to produce chair’s statement would be fined, it wasn’t joking. What no one knew at the time, was that it was already preparing to penalise an independent trustee firm for doing just that.

Dunce

Professional trustee firm PTL has been hit with the maximum possible fine for failing to meet the new governance requirements for not one but three schemes. This blunder has cost the organisation, which warned trustees more than a year ago about the dangers of missing deadline, a total of £6,000.

The firm notified TPR in May that it had failed to prepare a statement for the Precision Carbide Tools Limited Pension and Life Assurance Scheme.

After conversations with PTL, the regulator said it received confirmation that breaches had occurred for two more of the firm’s schemes – the Comshare Retirement and Death Benefits Plan and the EBC Pension Scheme

Professional trustee firm Pitman Trustee Limited has been hit with the maximum possible fine”

While a fine is mandatory for missing a chair’s statement – even if the trustee notifies TPR – the watchdog has some discretion over the amount that will need to be paid.

For instance, back in June, TPR issued a minimum mandatory £500 fine to the trustee of Abbey Manor Group Pension Scheme for failing to meet the same requirement.

PTL told the regulator it had taken action and prepared the required statements after the breaches had occurred, but the regulator opted the maximum penalty because the firm is a professional trustee and had no good reason for missing the deadline.

A statement from TPR read: “The maximum fine of £2,000 was imposed because the scheme had a professional trustee in place and there were no mitigating factors.”

Nicola Parish, executive director for frontline regulation at TPR added: “Professional trustees are expected to meet a higher standard of care and to demonstrate a greater level of knowledge and understanding than other trustees.”

This raises serious concerns about the independent trustee firm, which acts for a number of DC schemes. TPR expects a trustee chair to “assume similar governance responsibilities to those expected of a chair of any corporate board” and states that they need to be capable of “setting high standards for the board as a whole”.

Embarrassingly, PTL has already proved it is more than aware of the responsibilities of a trustee chair”

Somewhat embarrassingly, PTL has already proved that it is more than aware of the responsibilities of a trustee chair. In May last year, managing director Richard Butcher wrote a blog for the PTL website entitled Five reasons why you need to start thinking about your DC Chair’s statement now. His first reason – because the clock is ticking.

Butcher wrote: “Regulations from earlier this year require the trustees to produce an annual statement to members. This has to be signed by the chair of trustees.

“The statement needs to be produced within seven months of the scheme year end. The first year ends to be affected are those after 6 July 2015. In other words, the first statements should start to appear in January 2016.

“This sounds a long way off but there is much work to be done.”

Unfortunately, despite a year having passed since the blog appeared, it seems like that work hasn’t yet been carried out at PTL.

UPDATE:

Responding to this article, Richard Butcher, managing director at PTL said: 

“We’re sorry that the breach has occurred.

“We identified that these breaches occurred, [the regulator] didn’t drag it out of us, we identified it and we voluntarily and promptly reported ourselves.

“We then co-operated with the regulator’s inquiry and we accepted that we’d got it wrong in these three cases so when they fined us the maximum fine we accepted that and we paid it promptly. We take our responsibilities really, really seriously.

“For context, these schemes had all had their year end in August so they were some of the first schemes to which this new requirement applied. We have a system that tracks statutory deadlines for us. There was a delay in loading this onto it and it was when we put it on that we identified that we’d missed three already, so that’s when we reported ourselves.

“That system is now working perfectly well. We’ve since signed loads of chair’s statements and we’ve not missed any other deadlines and we won’t do in the future.

“We regret it and we’re sorry about it. There was no loss to any members, there was no increase in risk to any members, there was no loss to any of our clients, there was no increase in risk to any of our clients. None of that is to trivialise this, we take take it really seriously and we’re really sorry that we breached these deadlines, but that’s the context.”