PensionsNov 13 2017

Regulator issues record number of fines

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Regulator issues record number of fines

The number of fixed penalty notices and escalating penalty notices both reached new records, increasing by 14.2 per cent to 5,479 and by 3.5 per cent to 1,433 respectively, when compared with the previous quarter.

In total, 169 employers were taken to court for failing to pay an escalating penalty notice for not meeting their automatic enrolment duties, with fines totalling more than £1.25m.

During the period the regulator used its powers to issue 753 unpaid contributions notices to employees, up from 653 in the previous quarter.

These notices require an employer to ensure all backdated contributions are paid within 28 days.

Darren Ryder, director of automatic enrolment at TPR, said “it is not enough to just comply with automatic enrolment laws by signing staff up to a scheme”.

He said: “Employers must also meet their duties to contribute into their employees’ pensions every month.”

Mr Ryder added that there are now more than 800,000 compliant employers with more than 8.7m workers in workplace pension schemes.

He said: “The vast majority of employers are doing the right thing for their staff and are meeting their pension duties.

“Clearly 753 employers not paying contributions is a very small proportion of those that are compliant – less than 0.1 per cent.

“But every employer that is failing to make payments into their staff’s pension pot is one too many. We will not let employers get away with failing to meet their duties and we will take action.”

A fixed penalty notice of £400 is issued to an employer for failure to comply with a statutory notice or some specific employer duties.

Meanwhile an escalating penalty notice, which varies between £50 and £10,000 a day depending on size of the company, is issued after if the employer still hasn’t complied.

Nathan Long, senior pension analyst at Hargreaves Lansdown, said the figures reinforced a shift in focus from the regulator to "on-going management of company pensions".

He said: “Auto-enrolment was initially about bringing huge numbers of people who had never had a pension into retirement saving for the first time.

“It is now simply the way you join your company pension, but that does not mean employers can just down tools.

“There is a need to continually ensure your staff are going into the pension when they should, receive the contributions to which they are entitled and that you remain on top of any changes to legislation.”

Auto-enrolment, which was introduced in 2012, requires a minimum total contribution is 2 per cent - 1 per cent each from the employee and employer.

From April 2018, the minimum total contribution will increase to 5 per cent and one year later it will rise to 8 per cent.

A total of £17bn a year will be going into workplace pensions by 2019 to 2020 because of auto-enrolment.

Last year the Department for Work and Pensions launched a review of auto-enrolment, with a final report expected to be published in December.

maria.espadinha@ft.com