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"Make the punishment fit the crime" - what to do with tardy stagers!

18th Jun 2014
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My object all sublime

The stated purpose of auto-enrolment is to include 11m people currently excluded from pensions savings in good quality workplace pension schemes so they can receive more from the pensions system than their state pension entitlement.

I shall achieve in time

Rather than introduce auto-enrolment all at once, it is being introduced over time, allowing smaller companies more time to get ready to meet their new obligations to staff

To let the punishment fit the crime

If these obligations are laid down in law, not meeting them should be regarded as punishable. 

The Regulator has the right (not yet exercised) to impose severe fines on employers which flout the law. But is fining a company the best answer. Will the money flow into the Regulator's Christmas party fund (bonus' and mince pies all round)? It might as well for all most employers know. That punishment doesn't fit the crime, after all the victims of non payment of auto-enrolment contributions are the company's staff (the Human Resource as they are lovingly known).

This is not a victimless crime,the victims are known and any fine should recompense the victims and not be paid into some amorphous fine-box in Brighton.

The punishment fit the crime

My extremely learned friend Mr Jonathan Reynolds picked up on this point and tweeted with some brevity

https://twitter.com/jprtscom/status/478903836074319872

And make each prisoner pent

https://twitter.com/jprtscom/status/478908526916816896

Unwillingly represent

I propose that for each month he employer was late with their staging, they pay a month's worth of contributions.

A cause of Innocent merriment It will be slightly embarrassing for employers to have to pay employee contributions and explain they are doing this as punishment for not getting it right first time.

Of innocent merriment!

Imaginative regulation need not be as ridiculous as Pooh-Bah's in the Mikado.

I have some sympathy for small employers who get auto-enrolment but only "some". The bottom line is that the employee in Mrs Wiggin's tea-shop is every bit deserving of a proper pension as she would be if she works at the Tesco check-out.

We can't have carve-outs for small employers without even more complexity ( a small employer's national insurance rate anyone?). Jonathan Reynold's idea is not ridiculous- in fact it's very good. As I am going to be in the same Gherkin as @stevewebb1 tomorrow afternoon, I might bring this up with him after his talk to the Friends of Auto-Enrolment.

This article first appeared in www.penionplaypen.com

His teeth I've enacted

Have all been extracted

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By User deleted
19th Jun 2014 20:17

I will keep saying ...

... AE is the biggest, worst fiasco by any government ever.

It is typical of UK civil servants to take a simple idea and create an over complex and uneconomically bureaucratic process.

The simple solution would have been pension collected via payroll for ALL employees and gets paid to single administrator. If employee opts out this is notified to employer through RTI (and vice versa if they opt back in).

If employee wants to have contribution to own fund, like the old opting out system, inform administrator and they pay over to nominated fund. 

Simples, and little room for non-compliance

I am not holding my breath the powers that be will wake up and see reason instead of creating a swamp of red tape for small businesses and unecessary compliance costs they can ill afford.

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By Henry Tapper
20th Jun 2014 10:32

And you'll be right!

We wouldn't have done it this way either!

There are good things happening and they're coming from the private sector.

BIB are well down the track of creating a common data standard which can be used by providers (I know that others have tried and failed) but this initiative is going faster and further. This should make life easier for payroll.

The Friends of AE ( a CIPP initiative) got Steve Webb, some of his DWP policy people and the Pension Regulator in a room yesterday.There were sensible things said on both sides- I did not get the impression of an obstructive DWP or TPR

Accounting Web's efforts to raise awareness of obligations is a good thing.

 

Auto-enrolment isn't going away (anymore than NI or VAT!). So we have to make the best of it and painful as it is to use - a sense of humour is the best medecine right now!

 

 

 

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