UK pension watchdog The Pensions Regulator (TPR) has fined Rentokil Initial Pension Trustee £25,000 for failing to complete two valuations for its defined benefit (DB) pension plan.
According to TPR, Rentokil Initial Pension Trustee failed to complete 2012 and 2015 valuations of the Initial Hospital Service Limited No.1 Pension Scheme by their respective deadlines of July 2013 and July 2016.
Trustees of defined benefit plans in the UK are required to complete valuations every three years, and must submit a recovery plan and a schedule of contributions to TPR if the plan is in deficit. The purpose of the valuations is to allow TPR to check the health of a plan, and its ability to provide members with their expected retirement benefits.
“Agreeing a triennial valuation is a key priority for the trustee of a scheme and its sponsoring employer,” Nicola Parish, TPR’s executive director of frontline regulation, said in a release. “We are monitoring valuation due dates more regularly, and this fine shows we will take tough action sooner to put things right where breaches occur.”
TPR said the reason given by the trustee for the delay in completing both valuations was due to a planned merger with a separate pension plan run by the sponsoring employer, Rentokil Initial Plc. However, TPR said it repeatedly advised the trustee that the proposed merger was not a valid reason for failing to comply with the statutory requirements. It said it decided to take formal action when the proposed merger failed to materialize, and the valuations had not been submitted by the end of 2017.
TPR’s Determinations Panel upheld the recommendation that the trustee should be fined £25,000 under section 10 of the Pensions Act 1995 for its failure to take all reasonable steps to complete the valuations. The committee operates separately from other parts of TPR and is independent of the case teams and the investigation process in its decision-making. It also has a separately appointed membership and separate legal support.
Rentokil Initial Pension Trustee did not dispute the committee’s findings and the fine has been paid.
“The behaviors in this case were so severe that, not only did we issue improvement notices,” said Parish, “we also recommended to the Determinations Panel that a fine should be imposed at a level that would be likely to improve behaviors in the future and be an effective deterrent for other trustees.”
Tags: Rentokil Initial Pension Trustee, The Pensions Regulator, UK