Whistleblowing essentials
The Pensions Act 2004
Unless the circumstances in question are covered by legal privilege, a duty to give a written report to TPR arises where a person (a trustee, administrator, employer, professional adviser etc.) has reasonable cause to believe that:
- a duty which is relevant to the administration of the scheme (for example, overpayments, underpayments, any error in providing or funding for benefits) has not been or is not being complied with; and
- the failure to comply is likely to be of material significance to TPR in the exercise of any of its functions.
Civil penalties may apply to any person who fails to comply with this duty without a “reasonable excuse”. Penalties may be imposed of up to £5,000 for an individual and £50,000 in any other case.
When is a breach “material”?
Materiality depends on:
- the cause of the breach;
- the effect of the breach;
- the reaction to the breach; and
- the wider implications of the breach.
Practical guidance on this duty is set out in TPR’s Code of Practice, “Reporting Breaches of the Law”. The related guidance includes a “traffic light” system of breaches, where examples are categorised into red, amber and green. Under this system, a red breach should always be reported, a green doesn’t need to be reported and an amber breach should be considered in the context of its materiality to the scheme. Caution should be exercised and, if there is any doubt as to whether a report should be made, advice should be sought.
Timing of a report
Any report should be made to TPR as soon as reasonably practicable. What is “reasonably practicable” depends on the circumstances. Again, practical guidance on appropriate timescales can be found in TPR’s code of practice.
Commonly used abbreviations in pensions
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