Rise in fines for pensions auto-enrolment failures

Employment Law Partner Paul Maynard

The Pensions Regulator (TPR) is urging small and micro employers to engage early with pensions auto-enrolment or risk being fined.

TPR’s latest figures show a rise in the number of penalties issued for auto-enrolment failures. In April to June 2016 TPR used its powers to maximise compliance 4,489 times compared with 4,161 times in the previous quarter.

Unsurprisingly, the rise comes at a time when an increasing number of employers reached their deadline to comply.

In a press release, TPR identified two examples of compliance failures that led to employers being fined:

  • A travel agent with no eligible staff failed to complete a declaration of compliance because they wrongly assumed the law did not apply to them.
  • A garage owner did not complete a declaration of compliance because they thought an employee had done it.

Has your business met its auto-enrolment duties?

TPR has segmented UK employers into numerous bands according to their size, with each band being assigned a particular monthly staging date from which they were obliged to start the enrolment processes.

Small employers (those with fewer than 50 employees) should be aware that the staging date for them to automatically enrol eligible ‘jobholders’ in a pension scheme commenced on 1 June 2015, and they have until 1 April 2017 to complete the process.

Jobholders include permanent, fixed-term and temporary employees, as well as agency workers. A business can use an occupational or personal pension scheme if it meets statutory quality requirements. Alternatively, businesses can enrol jobholders in the National Employment Savings Trust (NEST), a central defined contribution scheme set up by the government.

Employers should test their payroll systems well in advance to ensure they are able to meet the auto-enrolment requirements.

For expert advice on pension auto-enrolment issues contact Gaby Hardwicke Employment Law Partner Paul Maynard:

Previous ArticleNext Article