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Pensions Bill

Where the regulator is of the opinion that an employer is not or may not be complying with its new duties under Chapter 1 of the Bill, it will need the power to conduct further investigations. It is important that regulators in whatever field have the power to conduct necessary investigative work. For example, HMRC’s inspectors have the power under Section 14 of the National Minimum Wage Act to require employers to produce records and to enter employers’ premises where necessary in the course of their investigation. Section 74 of the Pensions Act 2004 gives an inspector appointed by the regulator the power to enter premises for the purpose of investigating whether an employer is complying with certain legal obligations relating to pension provisions. Clause 44 extends Section 74 of the 2004 Act to give an inspector the power to enter premises to investigate whether the employer is complying with the new legal obligations the Bill creates in Chapter 1, Part 1. The noble Lord’s amendment would leave inspectors with the power to enter premises in the course of investigating, say, apparent irregularities of payments to pension schemes—the 2004 Act gives them that power—but to deny them that power in relation to the new duties created in the Bill, matters such as the requirements to automatically enrol eligible jobholders and calculate contributions accurately, and so on. That would seem a serious omission given the importance that we attach to saving for retirement and our commitment to helping low and medium-earning workers to provide for their old age. I do not expect the power to enter premises to be used lightly. We expect the great majority of employers to comply fully with the new requirements, and many, if not most, of those who do not will have done so inadvertently and will put matters right as soon as their errors are pointed out. However, there may well be cases in which workers have raised concerns about the employer’s behaviour or its administration of the scheme, or where an inspector had good reason to suspect that an employer may be giving false or misleading information. In those circumstances a visit by an inspector may be necessary to resolve any concerns. We are aware that some employers operate their business from their home address, and we expect that inspectors will take this into account when they plan to visit employers’ premises. The power of inspection will not apply where a dwelling house is not used for the purpose of trade or business. I hope the noble Lord is reassured by those explanations. As for the general procedures by which compliance with the Act will be verified, the Act gives the regulator power to have large amounts of information, for example from HMRC. That sort of information will carry the great burden of ensuring compliance, and the power to inspect premises will rarely be used.