Companies investigated for suspected non-compliance with new pensions rules
In just over eight months, all businesses employing 100 people or more will be required by law to have enrolled all of their qualifying employees into a pension scheme.Larger employers should already have schemes in place; however The Pensions Regulator has recently revealed that it is investigating 89 businesses regarding suspected non-compliance.
This could prove very costly, as penalties for non-compliance for larger businesses are £10,000 a day, and even for businesses within the SME sector employing 50-249 people are set at £2,500 a day.However with the deadline now approaching rapidly for small to medium sized businesses, some of the companies providing pensions are already approaching capacity and simply don’t have the resources to deal with the expected rush of applications.
So where does this leave companies which need to comply with the new legislation?Angelo Kornecki from Astute Wealth Management Ltd in Longridge says: “It is very worrying that The Pensions Regulator, whose job it is to oversee the implementation of the new legislation, has already launched 89 investigations into possible non-compliance by some of the largest public and private sector employers in the UK.
"These companies will have large payroll and HR departments and full access to financial and legal advice. Simply put if the largest of employers are getting it wrong, how will the thousands upon thousands of smaller employers cope next year when access to good quality advice may become difficult to come by simply as a result of the increase in demand?
"Employers need to be aware that The Pensions Regulator is actively policing auto enrolment and will launch investigations into companies whom they believe are not complying with the new legislation. If there's anything that this news tells us, it is that employers must start to prepare early for auto enrolment.”