If you own your own business then you are probably aware of auto-enrolment and what it means for your business. If not, you really ought to be. The Pensions Regulator (from here on out TPR) has announced that it has made 1,021 £400 fixed-penalty notices between 1 October and and 31 December. In the previous quarter, just 107 were issued.
The penalties are imposed on businesses who fail to automatically enroll their employees into a pension scheme by the time their staging date comes around. You can find out your staging date by clicking here. We strongly recommend you take a look at our comprehensive Guide To Auto Enrolment to make sure you fully understand auto-enrolment and what is required of you to ensure you comply. If you are a business with no employees, you still need to complete a declaration of compliance.
TPR has stated that the sharp rise in fines is due to the pension rules being applied to more employers, particularly smaller employers who are “more likely to leave it to the last minute”. Auto-enrolment works on a top-to-bottom principal, large businesses were required to comply first, and it gradually works its way down to smaller businesses. We have now reached the point where it is time for SMEs to step-up. On the whole, the majority of employers have put eligible staff into a pension without TPR having to take action, however, as is to be expected a number have failed to do this.
So far, the total amount of compliance notices sent is 4,818 and half of these have been sent between October and December alone, according to TPR. The regulator has also said the following:
- More than 90% of the first small employers required to put their staff into a workplace pension have complied with the law
- Since the pension rules started in 2012, 5.8 million people have been automatically enrolled into a workplace pension
- Employers may fail to complete their declaration of compliance because they wrongly assumed their business adviser was doing this for them. Employers and their advisers should be clear who is completing what automatic enrolment task and advisers should be clear about what services they offer
