Employers are being warned not to put their head in the sand after one business ended up with a £350,000 fine for failing to fully comply with its pension duties.
The anonymous case study is included in the most recent quarterly compliance and enforcement bulletin from The Pension Regulator (TPR).
Despite warnings from TPR, the employer, which has 5,000 staff, allowed an Escalating Penalty Notice to grow before correctly re-enrolling staff into the company pension scheme and paying the right contributions.
TPR director of automatic enrolment Darren Ryder said:
“This size of the fine is rare as the vast majority of employers now consider automatic enrolment to be an everyday part of running their business and helping workers to save. However, this case is a stark warning that failing to address problems early can lead to hefty fines which could be avoided…”
Following TPR’s intervention, the London-based company has now re-enrolled more than 40 staff and paid more than £100,000 of backdated pension contributions, as well as ensuring ongoing contributions are correctly calculated and paid. The backdated payments, which are in addition to the fine, cover both the re-enrolment failure and incorrect contributions affecting more than 2,000 staff.
Darren Ryder also highlighted how vital it is to carry out both ongoing duties and re-enrolment correctly. TPR will take action to ensure that not only are staff put into a pension, but they continue to receive the correct contributions on an ongoing basis and that those who opt out are re-enrolled correctly and given their right to start saving.
The quarterly compliance and enforcement bulletin, which reports on TPR’s use of powers between April and June 2019, also highlights how:
As part of TPR's new supervision approach, its relationship supervision teams are finding high standards and well-run schemes
TPR authorised seven master trust schemes in the period under section 13 of the Pensions Act 2017
TPR published a Determinations Notice detailing the first time it used its power to appoint a trustee primarily because of a lack of competence of the existing trustee board
More than 200,000 employers have met their re-enrolment responsibilities and tens of thousands of small employers (those with fewer than 50 staff) are approaching the third anniversary of their staging date