TPR keeps up pressure on employers to meet automatic enrolment duties

The Pensions Regulator has been actively pursuing employers that fail to meet their automatic enrolment duties whilst continuing its efforts to highlight these duties especially for small employers and recently created employers.

TPR names and shames employers who have been fined

The Pensions Regulator has published a list of employers ordered to pay escalating penalty notices after they failed to meet their automatic enrolment responsibilities. The Regulator believes that publishing the lists will highlight the importance of employers meeting their automatic enrolment requirements, emphasising the large fines that employers risk if they do not comply.

Meanwhile, the latest Compliance and Enforcement Quarterly Bulletin shows:

  • A large increase in the number of compliance inspections of business premises. A total of 227 inspections were carried out in the quarter, compared to the 57 in the whole of 2016.

The highest number of fixed penalty notices and escalating penalty notices were issued for automatic enrolment non-compliance during the quarter with over 14,500 fixed penalty notices and over 2,500 escalating penalty notices having been issued.

Shoe firm left with a £42,000 bill after automatic enrolment failures

Johnsons Shoes Company failed to complete its declaration of compliance for automatic enrolment by the deadline (30 September 2014) and despite intervention by the Pensions Regulator to educate and enable the firm to comply with its duties, these were not met. Therefore, the Regulator issued a compliance notice in April 2015 and after this was ignored, a £400 fixed penalty notice was issued in July 2015.

Although, Johnsons did pay the £400 fine, it did not fully comply with the law which led to the Regulator issuing an escalating penalty notice imposing a daily fine of £2,500.

The fine reached £40,000 before the firm became fully compliant and after refusing to pay the fine (citing that it was too busy to meet its pension responsibilities) the Regulator took civil action in the County Court to enforce the debt. The result was that Johnsons paid the £40,000 fine plus £2,000 court costs.

Charles Counsell (the Regulator’s Executive Director of Automatic Enrolment) said “The failure by Johnsons to act, despite our repeated warnings, left it with a completely unnecessary bill that was more than 100 times the amount it was originally fined”.

This case further demonstrates that the Regulator is increasingly prepared to take court action to enforce the employer duties on those employers that neglect these responsibilities.

Start-ups and instant pension duties

The Regulator has reminded new businesses (established on or after 1 October 2017) that they will have duties to assess and re-enrol eligible employees into a pension scheme.

Employers who were set-up before 1 April 2012 had staging dates between October 2012 and April 2017, while any employer who first pays PAYE income to a worker from 1 April 2012 up to and including 30 September 2017 will have a staging date between 1 May 2017 and 1 February 2018.

The Regulator will write to new businesses to tell them what they need to do, and by when, and it has also developed a new online suite of information and tools for new businesses. There is also corresponding guidance for their advisers on its website.

This new guidance will also be of relevance to takeover and merger situations where a new entity is created as a result of a takeover, because the new entity will be treated as a new employer.

The Regulator recently published research by Jigsaw Research on employer awareness which highlights that the majority of employers staging this year are confident that they will be compliant with their duties.

A business adviser survey was also published showing how advisers are helping micro and small employers’ with their employer duties. This highlighted the differences in services that advisers were providing with IFAs (44%) and HR Consultants (73%) being more likely to offer an advice-only or awareness-raising service. However, accountants (42%), payroll administrators (30%) and bookkeepers (33%) played a more active role by acting on behalf of their clients.

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