Regulator carries out auto-enrolment spot checks

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Regulator carries out auto-enrolment spot checks

Inspection teams will visit dozens of businesses in and around the city over the coming weeks to check staff are being given the workplace pensions they are entitled to.

The move is part of a nationwide enforcement campaign which began in London in April to ensure employers are meeting their duties.

Inspections have also been carried out in Greater Manchester, Sheffield, Edinburgh and Birmingham.

The checks will help the regulator understand whether employers are facing any challenges, such as getting their systems in place.

The regulator will also highlight employers who have not taken the required steps to become or remain compliant, paving the way for enforcement action.

The regulator's most recent quarterly auto-enrolment compliance and enforcement bulletin showed that in the first three months of 2017, a total of 4,673 fixed penalty notices and 1,043 escalating penalty notices were issued.

Darren Ryder, The Pensions Regulator’s director of automatic enrolment, said: “The vast majority of employers become compliant ahead of their deadline but these visits help us to identify why some have not, so we can take action where we need to.

“Every employer has workplace pension duties and we are determined that every worker gets the pension they are entitled to.

“Automatic enrolment is not an option, it is the law. Where we find employers are not complying with the law, we will use our powers to make them comply.”

Across the UK, 640,000 employers have met their auto-enrolment duties, with more than eight million workers now saving into a pension as a result.

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.

"The success of this approach will be critical in ensuring auto-enrolment is not undermined by firms looking to dodge their duties."

Malcolm McLean, senior consultant at Barnett Waddingham, said: "Random spot checks will inevitably be controversial but will no doubt identify some miscreants and will send a message out more widely that member's rights must be honoured."

Scott Gallacher, chartered financial planner at Leicester-based Rowley Turton, said: "To date, auto-enrolment compliance has largely been very good.

"However, as more and more smaller employers reach their staging dates, I expect that the 'non-compliance' will increase sharply. Consequently it's important that The Pensions Regulator is being proactive.

"In most cases this won't really be wilful 'non-compliance' but more due to a lack of time, resources and help available. Small business owners have many challenges and, unfortunately, I suspect many will just not give auto-enrolment the priority it needs."

stephanie.hawthorne@ft.com