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21 March 2017

Nearly a third of companies are seeking Auto-Enrolment support AFTER the deadline to do so has passed.

Companies that miss their staging dates face fines of up to £500. But The Pensions Regulator may be sympathetic if you act quickly.

The figures are based on 102 employers that registered with the pensions trust of the Corinthian Group in the last quarter of 2016.

Corinthian Affinity director Lee French commented. He said: “It is important that accountants, financial advisors and payroll providers get the message out now to their clients that swift action can help mitigate the potential fines if companies have missed their auto-enrolment staging date.

“Here at Corinthian, we have a ready-made, easy to use auto-enrolment solution which is compliant and cost-effective. It means our affinity partners can ensure their clients can have a qualifying workplace pension set up quickly and effectively, saving them time, money and stress.”

Companies missing their staging date are issued with an Escalating Penalty Notice by The Pensions Regulator. It orders business owners to comply with their statutory pensions duties within 28 days. After this time they will be subject to a fine which builds up by the day. For small employers (1 to 4 staff), the fine is £50 per day. For those with 5 to 49 staff, it is £500 per day.

New businesses offered a reprieve

The government has confirmed that new businesses will be offered a reprieve of up to three months before they have to enrol their employees in a workplace pension.

This reprieve is already in place for existing companies when they reach their staging date. However, it does not exist for new businesses entering the market.

The rule change is targeted specifically at employers whose employee headcount means they are automatically bound by auto-enrolment rules. Under current rules these new employers would have “near instantaneous AE duties applied to them.” The new rules come into force in April. They will ease this requirement, giving firms more time to deal with official administrative requirements for enrolling a new worker.

The rule change will also amend the auto-enrolment “duties trigger” for new businesses. Currently, the trigger date is the day on which PAYE income first becomes payable to any new worker. This means the employee couldn’t be automatically enrolled into a pension scheme until up to a month after starting work.

In future new businesses will have to comply with auto-enrolment legislation from the date the first worker begins his or her employment. The government says this change would make it easier for The Pensions Regulator to do its job.

Warnings issued to employers who fail to meet their pensions obligations deadlines have risen by 143 percent.

The increase refers to the 870 Escalating Penalty Notices issued in the last quarter of 2016. This brings the total number issued since auto-enrolment began to 1,477.

In the same period, the number of Fixed Penalty Notices – where companies are fined £400 for failing to comply with a statutory notice or specific employer duties – rose by 42 percent. Compliance notices, issued if an employer has contravened an auto-enrolment duty, have increased by a quarter.

In its report, The Pensions Regulator said it expected to see a rise in the use of its regulatory powers with the rollout of automatic enrolment for small and micro employers.

“Small employers can become non-compliant because they are more likely to leave things to the last minute. But in most cases the nudge of a compliance notice is enough to get them back on track.”

17 March 2017

Spot checks are to be carried out on employers across the UK to ensure they comply with auto-enrolment duties.

The inspections are part of The Pensions Regulator’s (TPR) ongoing enforcement activity to ensure employers comply with auto-enrolment obligations and are meeting their pension duties correctly.

Employers TPR judges to be at risk of failing to meet their duties are being visited. As well as providing valuable insight into employer behaviour, the spot checks are to investigate any non-compliance. The spot checks are also there to help employers get back on track or take enforcement action where necessary.

The inspections also serve as a warning to employers. They will show that they cannot ignore the workplace pension and that deliberate non-compliance will not be tolerated.

Executive Director of Automatic Enrolment Charles Counsell has commented. Counsell said: “Auto-enrolment has been a great success so far with more than seven million people now saving into a workplace pension. It’s important employers continue to make contributions into their staff’s pensions. These spot checks make sure ongoing compliance is being maintained. It is not fair to staff if they do not get the pensions contributions they are entitled to by law. We take non-compliance seriously and will take enforcement action when we need to.

Mr Counsell added: “As well as investigating any non-compliance, these inspections will also help shine a light on employer behaviour. This will help us see why different types of employers fail and identify good practice that others can learn from.”

Employers are given a short period of notice before the inspection and will be from a range of business sectors including those at risk of failing to meet their duties, for example the hospitality and retail sectors.

The Department for Work and Pensions’ (DWP) are reviewing auto-enrolment feedback.

Auto-enrolment feedback is wanted on the existing and future coverage of employee engagement and contribution levels.

Employers, employee representatives, pension industry professionals, accountants, payroll staff, independent financial advisers, employee benefits consultants and the general public have until 22 March 2017 to respond.

The DWP, an external advisory group, will lead the 2017 review of automatic enrolment. They will seek to ensure that auto-enrolment continues to meet the needs of individual savers. But also that the technical operation of the policy is working as it was intended.

The government has released a set of initial questions relating to the review. The questions call for feedback across three core areas: coverage, engagement and contributions.