The Pensions Regulator (TPR) has recently highlight the following problem areas:
Employer forgeting to do the declaration of compliance within 5 months of staging, many employers wrongly assumed that registering on the Government Gateway was enough.
Confusion caused by running multiple payrolls for the same employer for example weekly and monthly
Completing the declaration of compliance but without choosing a pension provider
Omitting self employed workers who have a contract to provide work personally
A survey by AutoenrolSME found that 6 out 10 businesses can’t cope and hired additional staff to manage the process!
A Poll in April 2014 of 200 businesses with 62 to 249 employees found:
63% of the employers didn’t know when their staging date was.
58% had not set up an auto-enrolment pension scheme.
90.5% of employers without an auto-enrolment pension scheme hadn’t even started researching one.
If you think you can ignore Auto Enrolment, think again, The Pensions Regulator will make you comply……..
Non-statutory action
We can issue guidance and instruction by telephone, email, letter and in person. Or we can send a warning letter confirming a set time frame for compliance with the duties. Statutory notices
Statutory notices can direct you to comply with your duties and / or pay any contributions you have missed or are late in paying. We have further discretionary powers which allow us to estimate and charge interest on unpaid contributions and direct you to calculate and / or pay unpaid contributions. Penalty notices
We can issue penalty notices to punish persistent and deliberate non-compliance.
A fixed penalty notice will be issued if you don’t comply with statutory notices, or if there’s sufficient evidence of a breach of the law. This is fixed at £400 and payable within a specific period.
We can also issue an escalating penalty notice for failure to comply with a statutory notice. This penalty has a prescribed daily rate of £50 to £10,000 depending on the number of staff you have.
We can issue a civil penalty for cases where you fail to pay contributions due. This is a financial penalty of up to £5,000 for individuals and up to £50,000 for organisations.
Where employers fail to comply with a compliance notice or there is evidence of a breach, we can issue a prohibited recruitment conduct penalty notice. This is currently set at a maximum fixed daily rate of £5,000 for organisations with over 250 staff. We aim to fully recover all the penalties that we issue. Court action
We can take civil action through the court to recover penalties.
Employers who deliberately and wilfully fail to comply with their duties may be prosecuted.
We can also confiscate goods where there is a criminal conviction and restrain assets during criminal investigations.
Research shows that Accountants are most likely to be asked to help SME’s and Business Accountant (a service provided by CIMA Members in Practice) have created a booking service to assist SME’s in getting help http://business-accountant.com/auto-enrolment/
So don’t be scared by Auto Enrolment, don’t delay drawing up a project plan, take action now to avoid problems with the Pension Regulator later!
Almost 70% of workers in Britain have little or no knowledge of the government’s plan to automatically enrol people in their company pension scheme from 1 October 2012. The change to pensions legislation means millions of people who have so far not been saving for their retirement will begin putting money aside for the first time.
Up to 10 million people will be placed into schemes from this autumn, under government plans to tackle the pension savings crisis, beginning with larger companies.
A Worker may include Agency workers and Self Employed workers depending on the their contracts
One Person companies are not subject to Auto Enrolment however, if the company takes on a second worker and the director and new employee have contracts of employment then both could become workers under auto enrolment.
Eligible Job holders are aged between 22 and state pension age and earn over £8105 and are automatically enrolled however Non Eligible Job holders could opt to join
Employer contributions will start at 1% from October 2012 till 2017 (2% total contributions), then 2% till 2018 (5% total contributions), then go to 3% (8% total contributions)
Employees can opt out but new Employment Rights will prevent employers from offering inducements to opt out and prohibit employers from anti pension recruitment policies and unfair dismissal relating to pension enrolment
If the employee opts out the employer must automatically re-enrol them every 3 years
The Pensions Regulator will have powers to issue compliance notices and fixed and escalating penalties increasing on a daily basis. Employees who blow the whistle on their employer will be protected under the Public Interest Disclosure Act 1998
