The Pensions Regulator has issued 4,794 fixed penalty notices of £400 to employers for failing to meet their auto-enrolment duties in the period April to June 2017, up from 4,673 the previous quarter – the largest total issued to date.
A total of 1,384 escalating penalty notices were also issued in the quarter, up from 1,043 in the first three months of 2017. This was also the highest quarterly escalating penalty notice total.
These facts are revealed in The Pensions Regulator’s compliance and enforcement bulletin published yesterday (10 August).
Fifty one employers have been issued with escalating penalty notices from The Pensions Regulator for a collective total of more than £425,000 for not meeting their auto-enrolment duties between April and June 2017.
These employers failed to pay their escalating penalty notices so the regulator secured court orders against them demanding payment.
They include both compliant businesses, and non-compliant businesses whose cases are being reviewed over the potential for further action.
The bulletin also revealed that 18 employers have been given escalating penalty notices for a collective total of more than £40,000, which they have paid.
However, despite having paid the EPNs between April and June 2017, these employers continue to be non-compliant with their workplace pension duties.
Employers named in the previous quarter who are now compliant have been removed from the list.
The compliance and enforcement bulletin lists both small and multinational companies, who have not met their auto-enrolment duties with county court judgments secured by the regulator for up to £52,500.
The vast majority of employers continue to be compliant with their workplace pension duties.
The regulator will consider taking additional enforcement action against employers who remain non-compliant, including prosecution in appropriate cases.
Tom Selby, senior policy analyst at AJ Bell, said: "We are now getting into the teeth of auto-enrolment, so it makes sense for The Pensions Regulator to step up its communications and enforcement work.
"The regulator faces a tough challenge in balancing pragmatism when dealing with firms who may never have engaged with pensions before with firm action where employers wilfully refuse to comply with the law.
"Given its limited budget, The Pensions Regulator is relying on instilling a culture of 'contingent compliance,' creating a system where compliance with pensions law is viewed in the same way as other tax and benefit requirements."
More than 690,000 employers have met their workplace pension duties to date, the vast majority of those who have been required to so far.
More than 8.3 million staff working for those employers are now saving for their retirement because of auto-enrolment.
The Pensions Regulator’s compliance and enforcement quarterly bulletin also includes a link to the names of pension schemes whose trustees have been fined for failing to complete scheme returns or annual chair’s statements.
Nicola Parish, The Pensions Regulator’s executive director for frontline regulation, said: “It is concerning that the trustees of some schemes, including those of some high profile organisations, are failing to complete some of their most basic legal pension duties.
“We expect trustees to comply with their basic duties including providing information in the scheme return on time. Accurate and up-to-date data is the lifeblood of a regulator and enables us to operate effectively. Non-compliance with basic requirements can also be an indicator of broader governance issues within a scheme.
“We want all members to be saving in well-run schemes and will take action to help schemes get the basics right. Size doesn’t matter – if you breach your duties, you will face action."
The bulletin highlights that the majority of schemes complied with new legislation obliging them to prepare an annual governance statement, signed by the chair of trustees.
Between April and June this year, the trustees of 20 schemes received a mandatory fine for not preparing a chair’s statement. A large proportion of those failing to produce a statement involved schemes with fewer than 100 members but some were large employers.
In the same period the trustees of a number of schemes failed to submit scheme returns even after receiving a warning from TPR, leading to the issuing of fines to 45 trustees.
stephanie.hawthorne@ft.com
