October 1st 2014 marked the second anniversary since the introduction of auto enrolment for larger companies. Since then 786 firms have been investigated by the regulator but unfortunately the regulations have continued to change which is resulting in significant confusion and misunderstanding for businesses.
To emphasis the point that auto enrolment is difficult, The Pensions Regulator (TPR) has released data showing that between January and August of 2014, 58% of investigations found potential or actual breaches. This is a dramatic increase since January 2014 when the figure stood at (a still high) 23%, and shows just how difficult it is for employers to comply with the rules.
Whilst it’s impossible to know exactly the reason why there are so many breaches, there appears to be evidence that many employers are simply not engaging with the process, and allowing too little time to prepare for what is a significant admin/payroll change.
In reality this is not surprising as the message has been very poorly communicated to employers, and especially smaller employer who are telling us that they simply do not understand the relevance of the “I’m In” campaign to their businesses.
Penalties for non-compliance can be as high as £10,000 per day for the larger business, but is still a significant £500 per day for smaller businesses with between 5 – 49 employees.
Burgis & Bullock are currently running a series of free auto-enrolment briefings across the Midlands, and delegates are shocked when we point out the 33 individual steps that employers must take prior to auto enrolling their employees. Unfortunately with the larger employers finding compliance a struggle it looks as if the issue will get much worse before it gets better.
We would urge all employers to take seek professional advice well in advance of their staging dates (ideally 12 months prior), and welcome any questions on the practical aspects of complying with auto enrolment legislation. Contact us today for more information or to book on one of our free briefings, of contact your local Burgis & Bullock office on 0845 177 5500.