Crackdown on companies rebranding to avoid pension payments

The Pensions Regulator (TPR) has announced a crackdown on employers that try to dodge their workplace pension duties by changing their company name

Ongoing TPR investigations relating to a company name change to avoid pension responsibilities involve scores of employees who have been denied pensions as their employers adopted a new name.

TPR investigators are now working with their counterparts at the Insolvency Service and other agencies to take action against companies that try to use this ploy.

Among the offences that may have been committed are fraud, theft and wilfully failing to comply with the automatic enrolment laws.

The regulator says it has evidence of a small minority of employers who could be trying to hide their non-compliance with the law by opening new businesses, transferring their workforce across and then dissolving the original businesses. The suspicion is that by changing name, those involved hope to avoid having to pay the pension contributions due.

Investigators are also looking into whether rogue advisers could be suggesting to employers that they use the tactic to avoid their duties.

TPR is currently carrying out short-notice inspections on employers across the UK that are suspected of breaching their automatic enrolment duties.

Darren Ryder, TPR’s director of automatic enrolment, said: ’Some bosses might think that changing the name of their company they can avoid their duties, but they should know they are on our radar.

‘We are aware of the camouflage they are trying to use and will not be fooled by it.

‘We will not tolerate any attempt to deny employees the workplace pensions they are entitled to - and will take action against those who try to dodge their duties.’

TPR says its compliance activity has moved away from visiting employers based on geographical location, and it is now targeting its efforts based on sources of information that will identify those who are operating outside of the law, such as via HMRC and whistleblowing workers.

As well as tackling so-called ‘camouflage’ companies, TPS says employers who set up ‘shell’ pension schemes to appear compliant but never pay contributions are a key target. They comply with the letter of the law but never pay the pension contributions due for their workers.

Other employers claim that they have no workers, , although there is data showing that they are paying wages, while some others claim that they are no longer employers, despite the fact that there are still staff on their payroll.

TPR says it is also addressing companies where it sees they have very high opt-out rates, which may prompt concerns that they are inducing workers to pull out of their pension scheme, such as by offering them cash upfront instead.

Pat Sweet | 24-07-2019

 

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