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TPR auto-enrolment enforcement back at pre-pandemic levels

TPR auto-enrolment enforcement back at pre-pandemic levels

The number of warnings issued to employers for failing to comply with auto-enrolment rules are back to pre-pandemic levels, the Pensions Regulator has said.

In its latest compliance and enforcement bulletin, published yesterday (September 9), the regulator said the use of auto-enrolment powers between January and June 2021 increased 86 per cent to 77,032, from 41,398 for July to December 2020. 

These figures compare with a total use of powers in the six-month period before the onset of Covid-19, between October 2019 and March 2020, of 73,164.

Reacting to the uncertainty created by the coronavirus pandemic, in March 2020 the regulator relaxed its usual requirement that auto-enrolment late payments be reported within 90 days. 

Defined contribution schemes were given an extra 150 days to declare late payments, so struggling employers had more time to work with pension providers to bring late or missing contributions up to date before enforcement action was taken.

However, the watchdog returned to the 90-day limit for reporting late payments in April 2021.

Mel Charles, director of automatic enrolment at TPR, said: “We have been clear with employers throughout the pandemic that they continue to have automatic enrolment duties and the majority have done the right thing for their staff despite the challenges. 

“While we introduced measures in the early months of lockdown to allow struggling employers more time to achieve compliance and avoid being unduly fined, figures published today demonstrate we have continued to robustly protect savers, using our powers where necessary to protect savers.”

Between January and June 2021 TPR issued 35,087 compliance notices, an increase of 36 per cent when compared with the period July to December 2020.

This is the notice employers receive when they have breached their auto-enrolment duties and outlines what steps they need to take – or stop taking – to be compliant within a given timeframe.

In addition, the number of unpaid contribution notices issued during the period more than doubled, from 4,090 in the previous semester to 11,921.

These notices require an employer to ensure all backdated contributions are paid before a certain date.

TPR also issued 22,542 fixed penalty notices – issued if companies do not comply with statutory notices or there is sufficient evidence of a breach of the law - up from 8,445 in the previous period, and 7,407 escalating penalty notices – issued for failure to comply with a statutory notice - compared with 2,964.

Maria Espadinha is the editor of FTAdviser's sister publication Pensions Expert

maria.espadinha@ft.com