Pensions regulator urges businesses to comply with auto enrolment requirements

Following a change in the law that requires employers to provide pensions automatically for their employees - “automatic enrolment” - The Pensions Regulator issued 162 compliance notices between April and August 2014. These statutory notices give employers a deadline within which to take certain actions. If businesses do not comply, they may face financial penalties. The first employers were fined for not meeting their duties. In addition, the regulator’s research found that some small employers do not realise the law applies to them.

This information was detailed in the latest auto-enrolment Compliance and Enforcement Bulletin published by The Pensions Regulator.

Automatic enrolment is a government initiative to help more people save for later life through a pension scheme at work. In the past, many workers missed out on valuable pension benefits, because their employer didn’t offer them a pension, or they didn’t apply to join their company's pension scheme.

Automatic enrolment applies to businesses both large and small. Staging dates (the date “auto enrolment” starts) have already started for larger businesses (from 1 April 2014-1 April 2015 for businesses with 50 or more employees). Smaller businesses with fewer than 49 employees are requirement to set in place auto enrolment between 1 August 2015 and 1 April 2017. The Pensions Regulator is advising that it can take at least a year to prepare properly for auto enrolment.

The Pensions Regulator’s executive director for automatic enrolment, Charles Counsell, said: “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.

“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.”

In the past two years, about 4.7 million employees have been put into a workplace pension scheme by their employer. More than 33,000 large and medium employers have complied with their duties. However, The Pensions Regulator calculates that there are more than 1.25 million employers who need to comply with their new workplace pensions over the next three years.

A new advertising campaign has been launched targeted at small and micro employers who, in some cases, only employ one or two workers.

If you or your business are facing legal issues to do with auto enrolment or any other pension matter, we can put you in direct touch with an expert Pensions barrister.