It has been announced that The Pensions Regulator has imposed fixed penalty fines of £400 on three employers for not meeting their duties.
The Pensions Regulator also issued 163 compliance notices in the three months to the end of September, compared with just 3 notices in the previous quarter. As ever smaller companies reach their staging dates these numbers could rise considerably.
Sean McSweeney, Auto Enrolment Specialist, Chase de Vere, says: “The news that The Pension Regulator has started to fine companies over auto enrolment failings is of little surprise to us based on the number of employers which are contacting us for help, when they are already very close to their staging date
“We have previously expressed our concerns that many employers are leaving it too late to plan for auto enrolment. These concerns are now turning into reality
“It is understandable that many employers have been focused on the day-to-day running of their business and so have delayed their auto enrolment planning. However for many this will prove a false economy as they now face severe disruptions to their business, including significant costs in terms of time and money, as they aim to meet their auto enrolment duties
“All employers need to accept that auto enrolment isn’t optional and so they will need to comply, either voluntarily or it will happen by force
“For those employers which don’t act in time we can expect further action from The Pension Regulator, even to the extent that some employers could be forced out of business. It is that important!
Glynn Jones, Divisional Director, Group Savings & Investments, LEBC Group (LEBC) comments:
“We are not surprised about these fines as we have been warning businesses they must meet their auto-enrolment obligations or face the consequences – simply they have no choice but to comply or pay the penalty.
“Unfortunately, a number of employers are still not engaging with their professional advisers to tackle their obligations. The Regulator has the powers to act and we have now seen it has imposed the first fines and more will follow if the warnings are ignored.”
Iain Chadwick, consultancy director at Johnson Fleming, said: “As more and more employers reach their auto-enrolment staging date, these figures represent what is likely to be a continuing upward trend across the UK business landscape.
“These findings also suggest that efforts from TPR and the Government to communicate the auto-enrolment message to employers are simply not getting through.
“Every employer throughout Britain should see this as an urgent wake-up call, to ensure they are not left behind in an increasingly complex pensions market. Whether you’re an SME approaching your staging date, or a large corporation heading towards re-enrolment, our advice is to avoid complacency and act now.
“With legislative changes such as alterations to defined contribution pensions already reshaping the landscape, it is essential that firms conduct a thorough audit of their scheme in order to remain compliant.
“I think this is just the tip of the iceberg for employers, who now face mounting pressure from the governing authority to avoid breaches and ensure the ongoing auditing and compliance of qualifying pensions.”