The Pensions Regulator is outsourcing the bulk of its employer enforcement obligations ahead of the 2012 automatic enrolment reforms, Money Marketing can reveal.
The Brighton-based organisation had an annual budget of £27.4m for 2010/11, with an added £10.4m for the employer compliance programme.
TPR has been exposed to Government-wide cuts of 25 per cent this year as it prepares for the UK’s biggest employers to begin auto-enrolling staff in October 2012.
The regulator is undertaking a procurement process to consider which activities it can delegate to a third party.
Outsourced functions are expected to be high-volume and low-complexity tasks, such as the issuance of penalty notices and sending communication letters to employers.
Interim executive director for employer compliance Charles Counsell says: “We are exploring opportunities to work with a third party to assist in the delivery of our pension reform responsibilities. We are in the latter stages of negotiating a contract for third-party assistance and expect this to be finalised later this year.
“However, the regulator will retain responsibility for the strategy, policy and guidance relating to the circumstances when enforcement action against an employer might be necessary.”
TPR is also preparing to release guides for large employers and intermediaries outlining all aspects of the new employer duties ahead of 2012.
Details of its compliance and enforcement strategy, including how it intends to deal with non-compliance, will be set out in the summer.
Towers of Taunton director Robin Keyte says: “I understand the trend for outsourcing but my concern is we will see a decline in administration standards.
“In terms of penalty notices, the firm handling them might be too keen to raise money through fines.”