As a result of Freedom of Information requests by the law firm, the number of Section 72 and similar front-line requests (requests used to request information or documents from a scheme) was at its peak in the fourth quarter of 2018. It was found that the number of cases decreased from 49 to just 11 in the fourth quarter of 2023. (Please refer to the following).
However, the law firm said the complexity and costs of these schemes were increasing rapidly, with so-called “kitchen sink” requests causing a domino effect between scheme advisers and providers.
Claire Carroll, a partner at Evershed Sutherland, said: “Section 72 demands have always been labor-intensive, but large-scale plans carrying large amounts of data have led to 'kitchen sink' demands from TPR. “That requirement is important when you're facing a crisis. And regulators want it, too.” Research the people in your supply chain. A domino effect is being created.
“Trustees, actuaries, lawyers, investment managers, accountants and sponsors can all participate in requests. The number of requests in this data may be lower as data tracking exercises begin. However, the workload may be significantly higher. This request may require collecting data related to a plan that has recently been brought under their wing.
Carroll added that pension plans and administrators should not look at these numbers and think that regulators are less demanding than before.
She explained: “In our experience, once a TPR initiates a claim in relation to a particular scheme, it takes multiple attempts over a long period of time before the TPR has any indication of what its enforcement case will be or whether it will be. Plans and trustees will need to consider these figures from a consolidation perspective and ensure that regulators are engaged in potentially large-scale investigations over a long period of time. Build the infrastructure in case regulators have a problem and need to pull together disparate data.”
TPR will seek information, documents, or clarifications only when reasonably necessary for the investigation and will avoid impacting the time and resources of the person seeking the information, documents, or interview or inspecting the premises. He said he is considering it.
A spokesperson for the Pensions Regulator said: “We are only seeking information that is reasonably necessary and commensurate with the scope of the investigation.”
“The largest pension schemes control the wealth of millions of savers. It is the right thing to do to ensure that these savers have the information they need to protect their interests.”
