Sarkauskas Limited v The Pensions Regulator

Relevant Chronology 03 December 2024 Date for Appellant to re-declare compliance 27 December 2024 CN issued 21 February 2025 FPN 24 February 2025 Declaration of compliance completed7 February 2025 Letter requesting review 14 March 2025 Review decision by TPR 27 March 2025 Notice of Appeal 16 April 2025 Respondent’s response 28 May 2025 Certificate of Compliance from the Appellant Type of hearing

1. Both parties consented to consideration without a hearing; pursuant to rule 32(1)(b) of the GRC Rules, I am satisfied that I can properly determine the issues without a hearing. I have considered the Bundle comprising of 74 PDF pages and the Certificate of Compliance as set out above. The Law

2. Section 1 of the Act establishes TPR as a body corporate. The objectives of TPR are, broadly speaking, to protect the benefits under occupational and personal pensions schemes, to maximise compliance with duties under the Act and to promote and improve the understanding of the good administration of “work-based pension schemes”. An employer’s duties include the automatic enrolment of employees by employers in a work-placed pension scheme, per section 3 of the 2008 Act.

3. The Act sets out, in Part 1, Chapter 1, a range of duties that an employer is subject to in relation to AE. Under Section 11, an employer’s duty is that they must give the prescribed information (known as the Declaration of Compliance) to TPR. The information is set out in regulations, the purpose is that the Declaration of Compliance enables the employer to demonstrate how they have met their duty to provide the information which statute requires them to provide to TPR. There is an initial deadline of 5 months from when the AE legislation applies to the employer; re-declaration is required every 3 years.

4. TPR may issue three types of notice under the Act. The two which are relevant here are a CN which is issued under section 35 of the Act and an FPN which is issued under Section 40 of the Act if an employer fails to comply with a CN; the amount of the FPN is £400. The Pensions Regulator may review an FPN (on request or by its own initiative) and, whilst any review is on-going, enforcement of that Notice is suspended.

5. The Tribunal’s powers are wide, the Act provides, at section 103: (3) On a reference, the tribunal concerned must determine what (if any) is the appropriate action for the Regulator to take in relation to the matter referred to it.

6. This Tribunal makes its own decision based on the evidence provided to it. The Tribunal will consider whether there is a reasonable (or good) excuse for failing to comply with the requirements of the CN as such excuse enables the Tribunal to quash the FPN. Consideration

7. The grounds of appeal are found at page 11 of the Bundle. They are: a. Non-receipt of the CN, their diligent compliance practices, lack of due dates on TPR dashboard and commitment to compliance (numbered 1, 2, 3 and 5). b. Impact of penalty being significant for a small company (numbered 4).

8. TPR’s response (pages 23 to 27 of the bundle) argues that the appeal should be dismissed as: a. The Appellant clearly received the FPN which was sent to the same address as the CN. The Appellant’s claim of non-receipt is a bare assertion, unsupported by evidence. There is a statutory presumption of service and the Appellant has not rebutted that presumption, by providing evidence of non-receipt. TPR is not obliged to send reminders to companies. b. Parliament fixes the amount of the penalty.

9. I will deal first with the Appellants numbers 1, 2, 3 and 5. The problem occurred when there was no declaration of compliance made. That is the point at which an FPN could be issued. Whilst it may be helpful for TPR to remind companies of their obligations, they are not required to do so; indeed they should be able to rely on a company diarising an important date like re-declaration.

10. I do not find that there was a reasonable excuse for failing to complete the re-declaration of compliance.

11. It is clear that, less than 2 months after the CN was sent to the registered address, the FPN was sent there and, clearly, received. 21 February 2025 (date of the FPN) was a Friday and it was on the following Monday (24 February 2025) that the declaration of compliance was completed; the Appellant’s own case is that they completed the declaration on receipt of the FPN.

12. I cannot reasonably accept that TPR should not have issued an FPN when the Appellant had firstly failed to complete their declaration of compliance and secondly overlooked, it would seem, a reminder (by CN) that was sent to the address when, just a short while later, the FPN was received.

13. I accept that, particular for a small business, a penalty of £400 may be very difficult; Parliament decided to enact a fixed system and the Tribunal has now power to vary the level of the FPN. Conclusion

14. For the reasons stated, I find that the Appellant has not demonstrated a good excuse for its failure to meet the requirements of re-declaration of compliance and accordingly, I dismiss the reference and remit the matter to TPR. No further direction is required. Signed Date: Judge Worth 22 January 2026