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Increase in auto enrolment fines "unsurprising"

30th Jan 2015
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The Pensions Regulator has reported an increase in the number of firms being fined for failing to comply with their workplace pension duties.

According to figures published in their recent bulletin, the total number of employers fined was 166 in the latter half of 2014. They were issued with fixed penalty notices of £400 apiece.

This is a large increase from the earlier months of 2014, when just three were issued. 

Adam Bexson, consultant at actuaries Barnett Waddingham, said that the rapid increase is "unsurprising".

“This certainly backs up our belief that smaller companies are finding auto enrolment more difficult to deal with than the big companies with larger resources who made the task seem easy," he said. 

"The sharp increase in the number of fines being issued at a time when the Regulator is writing to over 1m small companies is no coincidence. Without having the luxury of large HR, payroll and finance departments that larger employers benefit from, it seems logical that we will see the number of fines increasing at a greater rate as the months go by."

There was also a rise in the number of compliance notices sent to firms, with 1,139 being sent out, asking employers to fix a breach of one or more of employer duties, or else face a fine.

In addition, the number of employers reaching the date they have to confirm they have complied with the pension duties is increasing 'significantly'. The Pensions Regulator said it expects to see more employers who leave it too late or simply don't comply in coming months.

Around 30,000 medium sized employers had until December 2014 to complete their declaration of compliance. 

The Pensions Regulator’s Director of automatic enrolment, Charles Counsell, warned employers to declare within five months of their staging date. He recommended that those with staging dates approaching plan 12 months in advance.

“With the mass market roll out of automatic enrolment to large numbers of small businesses in the coming months, we expect to see an increase in how often we need to use our powers," he said.

AccountingWEB has launched the No-one gets left behind campaign to alert as many accountants as possible to the obligations implied by auto enrolment. Read our simple eight-point statement which sets out the auto enrolment facts you need to know.

Replies (4)

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By adagen
30th Jan 2015 16:11

No need for some companies to auto enrol

A company with no eligible employees does not need to set up an auto enrolment pension scheme. How does the Pension Regulator know whether a company falls into this category? Somehow, the company has to advise them and request that the records are updated appropriately. All the information being issued is about how to auto enrol, nothing about how to do the right thing to avoid penalties when a company doesn't need to auto enrol.

The answer, eventually tracked down via their helpline, is to send an email to the general enquiries address and hope that it actually gets recognised and somehow flagged on the various systems.

Emailing that address triggers an auto response promising a proper response within 5 - 10 days, so this needs to be tracked to ensure it happens.

I strongly suspect that a lot of penalies will be incorrectly issued when this manual approach fails.

Thanks (2)
By Nickymouse
09th Feb 2015 10:12

"A company with no eligible

"A company with no eligible employees does not need to set up an auto enrolment pension scheme"

Is this 100% correct?

As I read it, all employers have to set up a pension scheme regardless as to whether they have any eligible employees or not, just in case (I have tried to find the answer to this but have failed miserably) or have I misunderstood and you are talking about sole Directors with no employees?.

Most of our small businesses only employ part time employees and I would say none of them will want to join a scheme as they don't earn enough.

It would be a big help to us if these businesses were also exempt as who is going to want to waste time setting up these schemes and pay set up costs when the schemes are going to lie dormant and they know they are never going to use them?, It would make more sense to have a tick box at the top of TPR Declaration for these businesses to say that they have no eligible employees and are therefore exempt (is this too much to ask?????).

Is this just going to encourage small businesses (which after all are the backbone of this country!) to not take on full time employees or even close down rather than shoulder even more expense that they can ill afford?.

I think there are still too many questions that we can't find the answers to regarding Auto Enrolment for small businesses.

I thought TPTB were supposed to be cutting red tape so that employers could get on with running their businesses, all they seem to do is cut HMRC departments so that they can pass even more work and stress onto us for no or very little reward.



Thanks (0)
By SJBeale
30th Jan 2015 17:45

Pension Auto Enrolment

You could also write into the Pension Regulator to find out.

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By adagen
30th Jan 2015 18:10

Writing's possible but hardly cost or time effective when you need to get proof of posting to have a defence against penalties.

It's remarkably poor process to set up a system which doesn't apply to 100% of potential targets, and not include an efficient means of opting out. Equally it's poor process to issue voluminous documentation which lacks the opt out information. It doesn't take a great deal of thought to realise that processes should be adequate for all major target groups, and there are over half a million companies which don't need to autoenrol.

We keep hearing how overworked various bureaucratic organisations are, and in this we're seeing an example of why that is so and should not be so. This poor process guarantees that there will be significant cost in dealing with companies which are incorrectly penalised.

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