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Employers fined for failing to comply with pensions duties

Ref: PN15-05
Wednesday 28 January 2015

The total number of employers fined for failing to comply with their workplace pensions duties reached 169 by the end of 2014, according to figures released by The Pensions Regulator today.

The total represents a small number compared to the tens of thousands of businesses which have now complied with their automatic enrolment duties.

The latest automatic enrolment compliance and enforcement bulletin published by the regulator includes details of how many times it has used its statutory powers.

You can view the bulletin in our research and analysis section.

The number of employers approaching the date when they must confirm that they have complied with new workplace pensions duties (known as a declaration of compliance) is now beginning to rise significantly. In future months, the regulator expects to see more employers who, despite the message to prepare early, leave it too late or do not comply at all.

Key points from the bulletin:

  • Approximately 30,000 medium sized employers, (those with approx 62 - 149 workers), who staged in April-July had reached their deadline to complete their declaration of compliance by the start of December 2014.
  • A total of 166 Fixed Penalty Notices (£400 fines) were issued in the last three months of the year.
  • The number of compliance notices issued also rose with 1,139 notices issued. These notices instruct an employer to remedy a contravention of one or more of their employer duties or risk a fine or further action from the regulator.
  • A significant number of the notices issued in this period were to employers who had missed their deadline to submit their declaration.

The Pensions Regulator’s Director of automatic enrolment, Charles Counsell, said,

“My message to all employers is that failing to declare within five months of your staging date means you risk being fined, which is why we recommend you start your automatic enrolment planning and preparation 12 months before staging.

“It appears some medium employers waited for a prompt from the regulator before completing their automatic enrolment duties. Employers must complete all their duties including making their declaration of compliance to The Pensions Regulator.

“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.

“The vast majority of employers complete their duties on or ahead of time, but we are seeing a small minority that require the additional nudge of a notice from The Pensions Regulator.”

The regulator’s own research shows that the majority of employers who have completed the automatic enrolment process regret not allowing more time.

Experience to date also shows that employers should begin gathering the information they need to complete their declaration of compliance well in advance of their deadline.

There is a checklist (PDF 65.14kb 2 pages) for employers and their advisers to help them be ready to supply all the information the regulator needs on its website.

As well as highlighting compliance issues caused by employers failing to allow enough time to complete their automatic enrolment duties, the latest compliance and enforcement bulletin details how the effective use of the regulator’s powers directly assists in ensuring workers receive the pensions they are due in law.

Editor's notes

  1. The Pensions Regulator is the regulator of work-based pension schemes in the UK. We have objectives to: protect members’ benefits; reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
  2. Full details of the regulator’s compliance and enforcement approach to automatic enrolment are available in strategy and policy.
  3. A monthly report on the number of employers who have completed their declaration of compliance is published in our research and analysis section. All employers must declare their compliance to The Pensions Regulator after automatically enrolling their staff, within five months of their staging date.
  4. Eventually up to 1.3 million employers will have automatically enrolled up to 10 million eligible workers into a workplace pension scheme.

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Ciara Bridge-Butler 01273 648018