Auto enrolment penalties on the rise
Automatic enrolment (AE) into a workplace pension has been here for a while now and depending on their staging date, small and micro employers have been required to engage with the process to ensure relevant workers are enrolled correctly and on time.By Paul Jackson, Taylor Patterson.
While the vast majority of small and micro employers are successfully meeting their duties, it is clear from the recent bulletin from The Pensions Regulator (TPR) that, as the numbers beginning their employer duties are increasing, so the numbers of penalties are also increasing.This could be due to the very simple fact that, whereas medium and large companies have trained and dedicated staff to deal with payroll and the automatic enrolment of workers, small and micro employers often do not.
Employers need to be aware of their duties and what support is available to them;
- There are financial consequences of failing to fulfil their employer duties.
- There are options for advice out there.
- pick a qualifying pension scheme
- complete the assessment of workers correctly and on time
- enrol the relevant workers automatically
- communicate in writing to all workers
- complete the declaration of compliance.
- Failure to make employer contributions to the pension company - fine up to £50,000
- Failure to pay over worker's contributions to the pension company – fine up to £50,000
Remember that it is the employer, not their agent or the member of staff, who holds the legal responsibility for complying with the law.Workplace pensions are not going to go away, and the attitude to retirement has changed. It is now seen as the third, or golden age, and employees will need to save while working so that funds are available for planned projects during retirement. Historically this has not been happening, so employers have to play a much bigger part. The employer duties for auto enrolment if not met successfully by small and micro employers, will mean further increases in the number of penalties being issued and paid.