All employers are required to automatically enrol their UK workers into an occupational or personal pension scheme, driven by the organisation’s ‘staging date’ (the date your automatic enrolment responsibilities come into effect). The largest employers should have completed this from October 2012, with all employers phased in by the end of February 2018.
Eligible workers are those who are aged at least 22 with earnings over £10,000 per annum.
For such workers, employers have to:
– Contribute a percentage figure of their gross earnings between £5,824 and £43,000. The compulsory contributions are being phased in from 1% now,
increasing to 2% in 2018 and 3% in 2019; or
– Offer a suitable defined benefit scheme; or
– Make alternative contribution arrangements satisfying certain minimum requirements.
“Employers who wilfully refuse to become compliant should be in no doubt that we will take enforcement action against them, as these lists show,” said Charles Counsell, TPR’s Executive Director of Automatic Enrolment. “Automatic enrolment is not an option, it is the law. Allowing some employers to get away with non-compliance is not fair on the employees who are denied the workplace pensions they are entitled to and is not fair on the vast majority of businesses who have taken the time to meet their responsibilities. To date we have only had to bring court proceedings against a tiny proportion of employers, but every court case is one too many – and one that employers can easily avoid by becoming compliant.”
TPR issued more than 14,502 fixed penalty notices of £400 for automatic enrolment non-compliance to employers in the first three months of 2017, up from 2,919 the previous quarter – the largest total issued to date. This increase is in line with the expansion in the number of UK employers who have automatic enrolment responsibilities.
The Pensions Regulator issued a fresh warning to employers not to ignore their duties following a significant case in which a high-street footwear firm turned a £400 fine into a bill for more than £40,000 after claiming it was too busy to meet its pension responsibilities.
Johnsons Shoes Company was issued with a £400 fixed penalty notice after it failed to comply with the law on the automatic enrolment of its staff into a workplace pension. The company had been required to check whether its staff qualified to be put into a workplace pension scheme and to confirm to TPR that it had done so. Johnsons paid the £400 fine but still did not become compliant. Despite repeated reminders – and being warned that it would face a new fine that would increase by £2,500 per day if it did not meet its responsibilities – the fine reached £40,000 before the company became compliant.
Employers experiencing challenges in meeting their automatic enrolment duties should contact TPR as early as possible to discuss their situation.
Source – International Workplace