Auto-enrolment compliance increases

Auto-enrolment compliance increases

The level of compliance from employers in relation to the first increase in auto-enrolment contributions has been "very high", according to The Pensions Regulator.

In its 41-page annual commentary and analysis report, out today (20 September) the watchdog said employers across the country had successfully implemented the changes, but did not give further figures backing this up.

Darren Ryder, TPR’s director of automatic enrolment, said: "Employers nationwide have successfully complied with the law to give their staff the opportunity to start saving for their retirement, often for the first time.

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"Our role now is to ensure current and new employers continue to meet their duties, including re-enrolment and next year’s further increase to minimum contributions, so that the culture of saving remains strong.

"We will continue to act if employers fail to comply."

TPR based its analysis on data it has received from HM Revenue & Customs (HMRC).

The regulator’s report showed 84 per cent of employees are now saving into a workplace pension, an increase from 77 per cent last year.

The total amount saved into a pension by eligible staff in 2017 was £90.3bn, up from £86bn in the previous year.

About 98 per cent of schemes used for auto-enrolment were defined contribution (DC) schemes, an increase of one percentage point when compared with the previous period.

Auto-enrolment minimum pension contributions increased from 2 per cent to 5 per cent in April, with the worker now paying a minimum of 3 per cent.

The regulator said it will continue to monitor the data it receives from HMRC over time, with non-compliant employers being held liable to enforcement action.

TPR will also continue to monitor employers’ response to the second increase, which will take effect in April 2019, when minimum contributions will rise to 8 per cent, with the worker paying 5 per cent.

Darren Philp, head of policy at Smart Pension, said TPR’s report showed auto-enrolment continues to go from strength to strength.

He said: "More people are now saving more for their retirement and, even though it was a busy compliance year for the regulator in ensuring employers met their duties, compliance among smaller employers remains strong. 

"But there is always more to do and we need to remain vigilant to ensure we continue to build on this success.

"We also need to keep a close eye on opt outs when contributions again go up next April. But so far, so good."

FTAdviser reported last week that errors were found in half of the data employers sent to providers regarding auto-enrolment contributions of their staff, leading some to call on TPR to step in.