PensionsNov 4 2015

Pensions Regulator gets tough with companies who avoid AE

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Pensions Regulator gets tough with companies who avoid AE

The Pensions Regulator closed almost 500 auto-enrolment cases and issued compliance notices to another 470 employers between July and September.

The September figure brings the cases closed to 3,782 since AE was introduced in 2012.

TRP also issued 469 compliance notices for contravention of one or more enrolment employer duty provisions, making a total of 2,248 to date.

The number of employers who received a fixed penalty notice was 107, while two employers received an escalating penalty notice for failure to comply with a statutory notice. The penalty ranged from £50 to £10,000.

The watchdog also conducted 55 reviews, with 47 requested by employers who disagreed with the decision to issue a statutory notice. Of these 55 reviews, 17 were confirmed and 38 revoked, substituted or varied. The period saw two tribunals, the outcome of which were confirmed.

Facts and figures:

469 compliance notices issued

85 unpaid contributions notices issues
107 fixed penalty notices issued
Two escalating penalty notices issued
Two tribunals

TPR said that since 2012, more than 60,000 employers have enrolled over five million employees into a workplace pension. The report pointed out that only a small minority failed to comply with requirements on time, with most of the non-compliance non-intentional. TPR said it worked with employers to rectify problems from the outset.

In its 10-page Auto-Enrolment Compliance and Enforcement report, the regulator said: “In the next 12 months, more than 500,000 employers will go through automatic enrolment. We expect to see a rise in the number of times we need to use our powers, so our message to employers remains clear: start getting your plans in place early or you risk being fined.”

Adviser view

Tony Catt, compliance officer at East Sussex-based Anthony Catt, said: “This is the tip of the iceberg. There’s going to be more and more of those contravention notices going out because as AE roles out, it will roll out to smaller organisations who are not geared to providing it.

“TPR has been dealing with large employers who have payroll departments or software and are geared up to providing employee benefits. As AE rolls out it will get into the realms of people who can’t afford it, can’t do it and don’t know how to do it.”

Mr Catt added: “This is what’s going to happen over the coming months. Companies will simply not be geared up for AE. Smaller employers may not have the wherewithal to set it up, even with all the adverts they may not know who to ask. With the living wage coming in, that’s an increased cost to small employers who will be receiving contravention notices as that’s another expense. It will be a logistical nightmare.”