Pensions Regulator receives 114 Whistleblowing Reports about Auto Enrolment

The Pensions Regulator (TPR) has received 114 whistleblowing reports about employers allegedly inducing employees to opt out of auto-enrolment pension schemes in the past three years.

According to a Freedom of Information request published on the watchdog’s website, the majority (99) concerned allegations of inducement while the remaining 15 were about allegations of inducement along with other breaches.

The number of reports received have increased over the years – between April 2015 and March 2016 the regulator received 12 complaints, which rose to 38 in 2016/17, and 64 in 2017/18.

These numbers could increase even further, as Darren Ryder, TPR’s director of automatic enrolment, said in May the watchdog was receiving more than 80 reports every week from people who suspected employers were breaking the law on workplace pensions.

A spokesperson at TPR said the regulator took the issue of inducement “very seriously” but did not have evidence to suggest there was a widespread issue of employers attempting to induce workers to opt out of automatic enrolment.

She said: “The number of whistleblowing reports we have received must be taken in the context that more than 1.3 million employers have completed their declaration of compliance – almost all of them in the last three years – as automatic enrolment has expanded.

“Nevertheless, we would encourage any workers who are not being given the pensions they are entitled to, or who believe their employers are committing pensions offences, to contact us and we will investigate.

“Automatic enrolment is not an option, it’s the law. We will take action against employers who fail to comply with it.”

Malcolm McLean, senior consultant at Barnett Waddingham, said that he isn’t “especially surprised” that the numbers of whistleblowing reports have increased as the roll out of auto-enrolment has progressed.

He said: “Many employers particularly the smaller ones were known to be concerned about the increased costs auto-enrolling their workers would incur for them and would be tempted to find ways of influencing their employees to opt out.

“The reports may actually understate the true extent of the numbers and could even be the tip of the iceberg, although I have no means of knowing that for certain.

“Whether the regulator did enough to warn employers about the potential consequences of their actions in this respect is debatable and it should seriously consider even at this stage doing and saying more to discourage it.”

The most recent case involving a whistleblower was a healthcare company in Birmingham, whose staff were told that pension contributions were being paid by the employer when, in fact, a scheme hadn’t even been set up.

Crest Healthcare managing director Sheila Aluko was fined more than £20,000 after admitting misleading the regulator and failing to comply with auto-enrolment duties.

TPR had prosecuted a company for inducement for the first time this year.

Senior staff at Workchain, a national recruitment agency, impersonated their temporary workers to opt them out of their workplace pension scheme.

According to the regulator, the firm’s owners and directors, Phil Tong and Adam Hinkley, encouraged five senior staff at the company to get the temporary workers out of the scheme, so the company could avoid making pension payments on their behalf.

Financial controller Hannah Armson, HR and compliance officer Lisa Neal and branch managers Martin West, Robert Tomlinson and Andrew Thorpe then worked together to opt workers out of the National Employment Savings Trust (Nest) pension scheme using its online system, the watchdog said.

All of the defendants pleaded guilty to the offence when they appeared at Derby Magistrates’ Court in June.

Petaurum Solutions’ Comment

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This information is intended as a general overview and discussion of the subjects dealt with. The information provided here was accurate as of the day it was posted; however, the law may have changed since that date. This information is not intended to be, and should not be used as, a substitute for taking legal, HR or benefits advice in any specific situation. Petaurum Solutions is not responsible for any actions taken or not taken on the basis of this information. Please refer to the full terms and conditions on our website.


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