Declaration of Compliance

Lessons learned for employers from the Pensions Regulator's casework

Not completing a declaration of compliance can lead to a fixed penalty.  Employers who receive a notice or penalty issued by The Pensions Regulator (TPR)  can appeal in writing within 28 days of the date on which the review decision was made.  Most appeals are likely to be dealt with by the First Tier Tribunal.  TPR have recently dealt with two appeals made to the First Tier Tribunal by employers wishing to appeal review decisions.  In one instance the case was struck out and in the other the case was dismissed.

In one case an employer was issued with a £400 penalty for failing to declare compliance by their deadline (which is 5 months after your Staging Date). The employer challenged the penalty on the grounds that they had not received the preceding compliance notice and said that their post was frequently delivered to the wrong address.  TPR's review concluded that the employer had received the compliance notice – this conclusion was based on the recording of a telephone conversation between us and the employer, during which the employer acknowledged receipt of the compliance notice.  The employer did not agree with the outcome of our review and contacted the First Tier Tribunal to appeal the decision.  The Tribunal considered the appeal and agreed with TPR that there was no reasonable prospect of the employer’s appeal succeeding whether in whole or part, and consequently struck the case out.  In addition it was noted that the decision to impose a penalty of £400 was, in the circumstances, entirely reasonable.  The lesson here is, when considering whether to appeal or not, consider the evidence you have to support your claim and the evidence that TPR may hold, as judgement will be based on facts presented.

In the second case an employer was also issued with a £400 penalty for failing to declare compliance by their deadline.  The employer subsequently completed their declaration of compliance, and then requested a review of the penalty.  However the request made by the employer was received more than 28 days after the notice was issued.  This is outside the time frame during which a review should be requested, which was clearly stated on the penalty notice itself.

TPR therefore rejected the employer’s request for a review of the penalty.  The employer subsequently appealed, following the decision not to carry out a review of the penalty notice, by making an appeal to the First Tier Tribunal.  The Tribunal decided that it did not have jurisdiction to hear an appeal where the application for a review of the notice is made out of time, and where we have decided not to carry out a review on our own initiative.  A as result this case was dismissed.  The Tribunal went on to consider the grounds of appeal on the hypothetical basis that the Tribunal did have jurisdiction.  The employer’s grounds for appeal were that technical difficulties prevented them from completing the online declaration of compliance. It was determined that even if the employer had experienced difficulties in using the online system, it was open to them to complete the declaration of compliance in other ways such as over the telephone.

Lessons from Tribunals: „ Where an appeal has been requested out of time, the Tribunal does not have jurisdiction to hear the request. „ There are a range of options for declaring compliance, so if an employer is experiencing technical difficulties in one area this does not give them grounds for not complying on time. „ Not completing a declaration of compliance can lead to a fixed penalty.

Employers should contact TPR if they are experiencing technical difficulties.