Regulator plans spot checks on businesses

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Regulator plans spot checks on businesses

The Pensions Regulator will be carrying spot checks on businesses it suspects are not complying with their auto-enrolment obligations.

The regulator said these spot checks were part of an "ongoing enforcement activity" to ensure employers were meeting their duties correctly.

The announcement came in the wake of soaring instances of non-compliance among small businesses in the last year.

It also follows a warning last month that failure to comply with auto-enrolment rules could show up on employers' credit ratings.

TPR said it would police businesses it consider to be "at risk of failing to meet their duties".

Employers would be given a "short period of notice" before the inspection, with the regulator focusing on industries such as hospitality and retail.

In addition to uncovering non-compliance, the regulator said these visits would provide "valuable insight into employer behaviour", and "help employers get back on track or take enforcement action where necessary".

They would also serve as a warning to employers that they can not ignore the workplace pension and that "deliberate non-compliance will not be tolerated".

TPR's executive director of auto-enrolment Charles Counsell was keen to stress that, overall, the policy had been a great success, with more than seven million people now saving into a workplace pension. 

But he added: "It is not fair to staff if they do not get the pensions contributions they are entitled to by law. We take non-compliance seriously and will take enforcement action when we need to.

“As well as investigating any non-compliance, these inspections will also help shine a light on employer behaviour so we can see why different types of employers fail and also identify good practice that others can learn from.”

The vast majority of instances of non-compliance have involved small businesses, and have occurred in the last year.

In the last quarter of 2016, TPR issued 6,296 employers with compliance notices, bringing the total number of compliance notices issued since 2012 to 31,680.

In the same period, 919 employers were handed £400 fixed penalty notices, bringing the total since 2012 to 9,831. A further 870 escalating penalty notices were issued in the period, bringing the total to 1,477.

TPR recently reached a widely-praised agreement with Sir Philip Green over the BHS pension scheme

The agreement saw Sir Philip pay £363m into a new, standalone pension scheme for former employees.

james.fernyhough@ft.com