There has been a dramatic increase in the fines imposed on employers for failing to meet deadlines for enrolling staff into pension schemes. The Pensions Regulator imposed a fixed penalty of £400 each on 166 employers in the last three months of 2014. Previously to this, only three such fines had been issued.
The fines were issued because firms hadn’t submitted their declaration of compliance. This formal document needs to be submitted to the Pensions Regulator within 5 months of the firms start date for the auto enrolment process.
The increase in fines coincided with an increase in the number of medium sized firms obliged to complete Auto Enrolment last year. Medium sized businesses are those with 62-149 members of staff.
Auto enrolment, which was launched by the government three years ago, is aimed to ensure 10 million employees who are not currently in a company pension scheme wither join one or join NEST (National Employment Savings Trust).
The regulator expects 32000 firms will begin the process this year with 770000 small and micro employers will be obliged to join in the period 2015-17.
The regulator recommends that firms start planning at least a year before their staging date for auto enrolment.
The pension minister Steve Webb stated that ‘Companies need to know that they can’t ignore auto enrolment or the letters they receive from the pension’s regulator.
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