If your business is due to comply with the Automatic Enrolment regulations during the next few months, news that the regulator has started to issue fines will certainly make your ears prick up.
The Pensions Regulator has revealed it that in April (the latest date for which figures are available) it issued three firms with fixed penalty notices, each carrying a fine of £400.
In addition to the three fines, the regulator also issued a further 162 compliance notices giving rogue employers a deadline to comply with the rules.
April was an important month as it saw an increase in the numbers of firms having to comply with the rules. As we move into 2015, when businesses employing 30 or more people will need to comply, there is mounting concern that some employers still don’t realise Automatic Enrolment affects them.
Executive Director for Automatic Enrolment at the Pensions Regulator, Charles Counsell, commented: “We know most employers want to do the right thing and comply with the law. Where we take enforcement action by issuing a compliance notice, this gives employers the necessary wake-up call to provide the pensions their employees are due.”
He continued: “As we deal with smaller employers, we will see more who, despite our message to prepare early, leave it too late or do not comply at all. This type of non-compliance is not acceptable. We expect to see the number of times we need to use our powers increase.”
“It’s been two years since the first employers automatically enrolled their eligible workers into a workplace pension.”
“In that time, more than 4.7million workers have been put into a workplace pension scheme by their employer. That’s millions of people who have begun saving thanks to automatic enrolment. More than 33,000 large and medium employers have complied with their duties.”
“But we are not complacent. More than 1.25 million employers need to comply with their new workplace pensions over the next three years. For all these employers it is vital that they find out their staging date now, and plan early to ensure that they are ready in time.”
Fines for non-compliance
The initial fixed penalty notice for non-compliance of £400 is just the start of a series of fines and penalties for firms who do not comply.
A fixed penalty notice could be followed up by an escalating penalty of between £50 and £10,000 per day, depending on the number of employees a business has.
Furthermore, a civil penalty notice, where contributions are not paid, of up to £5,000 for individuals and £50,000 for companies could also be issued.
Eight jobs you should have ticked off within six months of your Staging Date
2015 will see many smaller employers have to comply with the new rules. If you run a small business and are within six months of your Staging Date, here is a list of jobs you should have already ticked off:
Task #1: Confirmed your Staging Date
Task #2: Confirmed which of your staff are ‘Workers’ as defined by the Automatic Enrolment legislation
Task #3: Confirmed which of your Workers fall into each of the three categories:
- Eligible jobholder
- Non-eligible jobholder
- Entitled worker
and therefore which of your Workers will need to be automatically enrolled into a pension scheme
Task #4: Reviewed your payroll system to ensure it supports Automatic Enrolment
Task #5: Reviewed your employee data to ensure you have all the information you need about your Workers
Task #6: Started to communicate with your Workers to make them aware of Automatic Enrolment and how it will affect them
Task #7: If you have one, reviewed your existing pension scheme to ensure it is compatible with Automatic Enrolment legislation. Will the pension provider allow new members? Not all will, which means you might need an additional scheme
Task #8: Decided on which pension provider you will enroll your workers into
How did you do?
If you have already completed all of these tasks, congratulations, you’re clearly on the ball and ready for Automatic Enrolment.
However, if you’re not so well prepared we’re here to help.
Whether you have not started, or completed some of these tasks but are finding it tough going, our team of Automatic Enrolment experts are here to help.
Call us today on 0115 933 8433 or email info@investmentsense.co.uk for more information.
