There are mounting concerns within the pensions industry that employers may be falling behind in complying with Auto Enrolment legislation.
The Pensions Regulator (TPR’s) latest auto enrolment report suggests that almost 8,000 employers could have missed their staging date. According to TPR, up to the end of May 2014 only 15,099 employers had confirmed their auto enrolment scheme details.
However, a Freedom of Information Request from Hargreaves Lansdown shows that from 1 October, 2012 up to 1 May, 2014, 22,940 employers should have hit their staging date. They do have up to 5 months to register their scheme. With over 14,000 having hit their staging date in the past 2 months, perhaps many of them just haven’t yet got round to it yet.
However it is no secret within the industry that the recent bottleneck of employers trying to stage has put huge strain on the industry as a whole. Turnaround times have been creeping up quite significantly as life offices struggle with the work load.
A Reminder of Possible Fines
So far the regulator has been fairly pragmatic in the approach it has taken with non-compliance. If you look through the “Compliance and enforcement Strategy” document available on the TPR’s website, they are trying to promote a “pro-compliance” culture.
However this is in cases where it is clear that the employer has been actively trying to comply with the rules. It is important that companies understand that taking no action is really not an option as the fines at the TPR’s disposal are extremely punitive.
Fixed Penalty notice (FPN)
This is a fixed amount of £400, which needs to be paid within a specified period. If the employer fails to pay the financial penalty and remedy the breach, in certain circumstances the regulator may consider a further action.
Escalating Penalty Notice (EPN)
Under the most serious circumstances the TPR has the following daily fines at their disposal which are dependent on the size of the employer.
|Number of Persons||Daily Fine (£)|