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Prepare early to avoid the risk of a fine: Don't ignore the workplace pension

Ref: PN15-47
Thursday 29 October 2015

The Pensions Regulator’s latest compliance and enforcement bulletin shows the importance of all employers knowing how workplace pensions law applies to them and of acting in a timely manner to tell the regulator how they have complied with their legal duties.

Figures published today in the quarterly compliance and enforcement bulletin show where the regulator has used its powers between July and September this year.

More than 60,000 employers had completed automatic enrolment at the end of September, with a small minority failing to comply with their legal duties by their deadline. The majority of this non-compliance has been unintentional and the regulator has worked with these employers to put matters right.

The regulator’s interactive website has been updated this month to help small and micro employers understand just what legal duties apply to them and when.

Executive Director of Automatic Enrolment Charles Counsell is urging employers to allow time to understand how the law applies to them and avoid enforcement action:

“Employers can avoid triggering a Compliance Notice by following the clear step-by-step information we provide on our website. This includes completing a declaration of compliance within five months of the date their duties went live.

“My message to employers is get your plans in place early, meet the deadline to complete a declaration to let us know how you have met your duties. Don’t ignore workplace pensions and risk a fine.”

The quarterly bulletin now includes figures detailing the number of employers who have challenged our use of statutory powers, requesting a review or appealing to an independent tribunal.

Since 2012, there have been 379 reviews requested by employers who disagreed with a statutory notice issued by The Pensions Regulator. Many of these appeals related to people who – due to a change in circumstance or because they were single person directors – did not employ anyone on their staging date. In these cases the statutory notice is usually revoked.

On six occasions, employers have appealed against our use of powers to an independent tribunal. In one case, the tribunal judge confirmed that employers’ completing the declaration of compliance is an important source of information to the regulator, and central to the regulator’s functions.

Key points in the bulletin

Between July and September this year the regulator issued:

  • 469 compliance notices
  • 85 unpaid contributions notices
  • 107 fixed penalty notices
  • 2 escalating penalty notices

Lessons from Tribunals

  • Where an appeal has been requested out of time and the regulator declines to carry out a review, the tribunal does not have jurisdiction to hear the request.
  • Employers having difficulty completing the online declaration of compliance should contact the regulator as soon as possible to avoid missing their deadline.
  • Not completing a declaration of compliance on time can lead to a fixed penalty.

The bulletin also reminds large employers who staged in 2012 / 2013 that they have automatic re-enrolment duties.

Every three years employers have a legal duty to assess and re-enrol eligible staff into a workplace pension. Automatic re-enrolment is broadly a repeat of what the employer did at staging although employers are likely to already have a scheme in place and well established processes for assessing workers.

Editor's notes

  1. The Pensions Regulator, which continues to take a risk-based proportionate approach to its compliance and enforcement activity, regularly reviews its strategy and policy.
  2. Those who believe they are not or are no longer an employer should inform us of their changed situation. They should follow the instructions in the duties checker on our website.
  3. Employers have 28 days from the date of issue of the notice or penalty to apply for a review. Details on the review procedure, including appealing a review decision to The First Tier Tribunal (General Regulatory Chamber) are available on our website.
  4. 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).

Press contacts

Rebecca Sandles 01273 811870
Ciara Bridge-Butler 01273 648018
Out of hours 01273 648496