Pension Regulator’s letter alert on Auto Enrolment
The Pensions Regulator’s most recent employer tracker research showed that around half of micro employers and 20% of small employers are not clear about when their Auto Enrolment duties come into effect.
To help employers avoid the mistake of failing to prepare on time, the Regulator is now sending out letters to alert all employers about when their auto-enrolment duties start.
Compliance and enforcement
Last month, the Regulator published its quarterly declaration of compliance bulletin, which showed the total number of employers fined for failing to comply with their workplace pension duties reached 169 by the end of last year.
The number of compliance notices issued also rose, with 1,139 notices issued. There are those who, despite our message to prepare early, leave it too late or do not prepare at all.
We want to work to enable employers to meet their duties, but deliberate non-compliance will not be tolerated and employers who fail risk financial penalty. We want to ensure that workers get the pension contributions that they are entitled to.
Declaration of compliance
With the aim of helping small employers learn from others and avoid non-compliance, the bulletin also highlights the main reasons why we have needed to use our powers. One of the main ways some employers were caught out was because they failed to meet their declaration of compliance deadline. The declaration of compliance must be completed five months after the staging date.
Take action
Employers should start planning for auto-enrolment 12 months before their staging date. They will need to ensure all their staff records are up to date and have a pension scheme in place six months beforehand. They should also ensure their payroll solution has the capability to carry out auto-enrolment processes and is compatible with other systems. The way to ensure this is to test systems well in advance of the start date.
The roll-out of auto-enrolment has so far been successful, with the majority of employers meeting their duties without the need for us to use our statutory powers. Our message to small and micro employers is to keep an eye out for the letter from us and take action