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Big rise in auto enrolment pension fines

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5th May 2015
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The Pensions Regulator made 192 ‘fixed penalty’ notices of £400 in the first quarter of 2015, up 120% from the previous quarter, according to Creative Auto Enrolment, a pension adviser.

Fines on employers for not complying with new workplace pension duties increased sharply in the first four months of 2015.

In April last year, thousands of medium-sized employers started enrolling workers into auto enrolment (pensions for workers who previously didn't have one).

“It’s no surprise to see that penalty notices from The Pensions Regulator has once again increased over the last quarter,” said David White, managing director of Creative Auto Enrolment.

Recent research by the business found that just 24% of these businesses will find time to implement auto enrolment and make it a success.

The Pensions Regulator said eight in ten smaller medium and small employers have consulted an adviser to help them comply with their duties but despite this there are “gaps in knowledge”, in particular among accountants and bookkeepers who “continue to have the lowest level of understanding of all intermediaries about automatic enrolment.”

The regulator has published a guide on setting up payroll for automatic enrolment.

Replies (5)

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Locutus of Borg
By Locutus
05th May 2015 15:17

That's nothing

The Pension Regulator's own data shows

http://www.thepensionsregulator.gov.uk/docs/automatic-enrolment-employer...

In 2014/15 32,000 medium sized employers (who ought to have the time and resources to do this stuff) staged.

In 2015/16 152,900 small and micro employers (some of whom have no idea what AE means) will stage.

In 2016/17 an army of 617,000 small and micro employers will stage.

I expect the number of fixed-penalty notices will increase by at least 100 fold by 2016/17.

Thanks (1)
Replying to DJKL:
Francois
By Francois Badenhorst
05th May 2015 17:27

Hundred fold?

That's intense.

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Replying to Cheshire:
Locutus of Borg
By Locutus
06th May 2015 10:52

Yes, I wouldn't be surprised

FrancoisB wrote:

That's intense.

617,000 is 19.3 times higher than 32,000.  However, there is a much, much greater degree of AE ignorance (or indeed what to do about it) within small and micro companies than there is within the medium sized company sector.

I suspect there will be several thousands of micro employers (particularly unrepresented ones) which arrive at their staging dates in complete ignorance of AE.  They binned the correspondence from The Pension Regulator as they didn't understand that "auto enrolment" meant "compulsory workplace pensions" or that "staging date" meant "the date at which the compulsory workplace pension starts".  They assumed it was all something complicated that only applied to larger companies.

Thanks (1)
By ireallyshouldknowthisbut
06th May 2015 14:32

.

192 is not many.

In addition I wonder how many of the fines are actually valid, and how many are going out to closed businesses. 

 

 

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avatar
By MorganM
07th May 2015 16:37

"despite this there are “gaps

"despite this there are “gaps in knowledge”, in particular among accountants and bookkeepers who “continue to have the lowest level of understanding of all intermediaries about automatic enrolment.”"

I hope the term accountant there is largely made up of 'unqualified/unregulated accountants', as any accountant under a governing body worth their salt should be well informed about auto-enrolment.

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