You can bet they are!
The Pensions Regulator (TPR) has already issued its first fines to non-compliant employers for failing to meet their auto-enrolment duties, in what is widely seen as just the start of what may be a deluge of penalties under the new regime.
The latest bulletin issues by the Regulator entitled ‘Compliance and Enforcement’ discloses that three fixed penalty notices have been issued each levying fines of £400 on the businesses concerned, although the precise nature of the compliance breaches is as yet to be revealed.
In addition, the bulletin which includes businesses that staged in April of this year (2014), shows that in total some 163 compliance notices were issued, these notices give those employers affected a clear deadline by when certain actions have to be completed or penalties will apply. Again all these remedial tasks take extra time to complete and when help, guidance and support is required then that is charged at premium rates.
Consequential damages
We have noticed that a strange phenomenon occurs as soon as workers become aware that The Pensions Regulator has taken an interest in their employer’s wrong doing, they suddenly become very savvy about their pension entitlements and in particular what they have been missing out on under the new legislation, this is resulting in groups of employee’s demanding backdated contributions into their pension pots!
With actual compliance breaches doubling during 2014, experience shows that many business owners are still burying their heads and hoping that it will go away despite the written reminders from TPR and now the chaser telephone calls.
The Regulator feels justified as it starts to bear its teeth.
Charles Counsel, executive director at TPR stated “Where and when necessary we will take enforcement action by issuing a compliance notice, this will give the employers the necessary wake-up call to provide the pensions their employees are due.”
He continued “As we reach the smaller employers, we will see more which, despite our message to prepare early, leave it too late or do not comply at all. This type of non-compliance is not acceptable. We expect to see the number of times we need to use our powers increase.”
“It’s been two years since the first employers automatically enrolled their eligible workers into a workplace pension. In that time, more than 4.7 million workers have been put into a workplace pension scheme by their employer. That’s millions of people who have begun saving thanks to automatic-enrolment. More than 33,000 large and medium employers have already complied with their duties.”
“But we are not complacent. More than 1.25 million businesses are yet to comply with their new duties and will do over the next three years. For all these employers, it is vital that they find out their staging date now, and plan early to ensure that they are ready in time.”
Future Developments?
There can be no doubt that the number of breaches and fines will increase significantly over the coming months. Remember that the firms included in the report to date are larger employers, many of whom have dedicated payroll, HR or Legal departments who should be well placed to deal with the added complexities that Auto Enrolment has brought. It is an undeniable fact that these luxuries are not available to smaller SME Employees.
At Burgis & Bullock we are running a series of free briefings on the pitfalls of pensions auto-enrolment and how to avoid them. To book on one of these briefings simply visit the events page of our web site and find the location nearest to you, or contact your local office on-line or by calling us on 0845 177 5500.