Jurisdiction(s):
United Kingdom

Auto-enrolment penalty overturned: First-tier Tribunal (GRC) criticises TPR’s disproportionate approach to declaration of compliance breaches in Cofal Ltd v TPR, stressing substantive compliance and review powers

Published on: 15 July 2024

Published by a LexisNexis Pensions expert

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Article summary

Cofal Ltd v Pensions Regulator [2024] UKFTT 578 (GRC) What are the practical implications of this case?

It is the second occasion in three weeks that the First-tier Tribunal—specifically Tribunal Judge Hughes—has set aside penalties imposed for auto-enrolment non-compliance, and, in doing so, has explicitly taken the Pensions Regulator to task for failing to act proportionately and for misunderstanding the extent of its own powers on review (see also Gianni’s Glasgow Ltd v Pensions Regulator [2024] UKFTT 507 (GRC), 17 June 2024). From his remarks in this matter, the judge’s view appears to be that the Regulator has lost sight of the fundamental purpose both of the regulatory framework and of its own existence: ensuring that employers fulfil substantive obligations to enrol staff into a qualifying pension scheme and to pay employer contributions.

The tribunal’s emphasis on the primacy of an employer’s compliance with those underlying duties—and the plain implication that the procedural requirement to submit a declaration confirming that compliance is of secondary importance by comparison—may prompt a re-evaluation by the Regulator of its approach to this issue and/or a review of penalties for...

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