Thousands of small employers complete their workplace pensions duties
Thursday 28 January 2016
More than 90% of the first small employers required to put their staff into a workplace pension have now complied with the law, showing that automatic enrolment is successful for all sizes of employer.
The Pensions Regulator’s compliance and enforcement bulletin, which is published today, shows that compliance remains the norm.
Around 12,000 small and micro employers became subject to the new legal duties last summer. The majority have put eligible staff into a pension without the regulator having to use its powers although, as expected, a number needed the additional nudge of enforcement action.
Minister for Pensions, Ros Altmann said:
“The latest figures highlight the on-going success of auto-enrolment. It is really encouraging to see that so far, the vast majority of small and micro employers have set up a workplace pension for their staff and are helping them on their way to a more financially secure retirement. From now on, the smallest employers will start to meet their obligations and we must ensure they know what to do and have help if they need it.
“So far 5.8 million people have been automatically enrolled into a workplace pension. Thanks to automatic enrolment workplace pensions are becoming the norm and we expect 9 million people to be newly saving or saving more.”
The bulletin shows that between October and December, there was a sharp rise in the number of statutory notices issued by the regulator. This reflects the rise in the numbers of employers with automatic enrolment duties and the changing employer type.
Research shows that smaller employers are more likely to leave things until the last minute and this means they are more likely to receive a compliance notice which could lead to a fine.
The bulletin shows that since the start of automatic enrolment:
- 4,818 compliance notices have been issued
- around half of these (2,596) were issued between October and December last year
- a total of 1,594 £400 Fixed Penalty Notice fines have now been issued to employers
- just over a thousand (1,021) Fixed Penalty Notices were issued in the last quarter of 2015
Executive director of automatic enrolment Charles Counsell said:
“It is very encouraging that more than 90% of the smallest employers have complied with the law, clearly highlighting that automatic enrolment is successful for all sizes of employer.
“Today’s figures show that the majority of employers are doing the right thing on time and putting their staff into a pension.
“We have always expected to see a rise in the number of times we use our powers as large numbers of small and micro employers reach the date their duties come into effect. Compliance notices act as a warning and give employers a deadline to meet their duties and avoid a fine.
“Automatic enrolment is the law for all employers and we will use our powers where necessary to get them back on track.”
- Other key findings the latest bulletin:
- The regulator is again warning employers to start planning in good time. The majority of compliance notices were issued because employers had left their preparations too late.
- Employers and their advisers should be aware that an employer issued with a fine will still be required to pay it, even when they complied with their duties.
- Employers can become non compliant by failing to complete their declaration of compliance because they wrongly assumed their business adviser was doing this for them. Employers and their advisers should be clear who is completing what automatic enrolment task and advisers should be clear about what services they offer.
- The Pensions Regulator is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to 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).
Ciara Bridge-Butler 01273 662 018
Matt Adams 01273 662086
Rebecca Sandles 01273 811870