The Pensions Regulator (TPR) is issuing an increasing number of escalating penalty notices (EPN) to get companies to comply with their auto-enrolment duties.
This is despite the watchdog’s Automatic enrolment: compliance and enforcement report showing compliance rates remain high, with over 95% of the first small employers required to put staff into a workplace pension having complied.
The regulator issued 96 EPNs this quarter, bringing the total issued to 127 since auto-enrolment was initiated in 2012. This is one of TPR’s statutory powers to help maximise employer compliance with auto-enrolment duties. Fines for small employers with one to four staff who fail to comply with an EPN is £50 per day and rises to £500 per day for those with five to 49 staff.
Also, 3,057 compliance notices were issued between January 2016 and March 2016, bringing the total number to 7,834 since 2012.
It issued 806 fixed penalty notices in the first three months of 2016, bringing the total to 2,234 since 2012.
The watchdog warned employers that fail to heed 28-day warning notices risk a fine which increases each day.
It follows the regulator fining Swindon Town Football Company £22,000 for failing to meet its auto-enrolment duties.
TPR executive director for auto-enrolment Charles Counsell said: “It’s simply not fair for staff not to receive the pension contributions they are legally due. But failing to act also means an employer risks clocking up a significant penalty until they put things right. If things aren’t going well, then talk to us; don’t ignore us.”
Pensions minister Ros Altmann added: “It is most encouraging to see even the smaller employers are managing to do this, and the proportion facing enforcement action has stayed remarkably low.”
Commenting on the report, Aegon head of pensions Kate Smith said: “It’s good to see that TPR has teeth and is using its powers to fine non-compliant employers, sending out a message that failing to play by the automatic enrolment rules is simply not acceptable.
“She was not surprised to see an upward trend in the number of fixed and escalating notices given the smallest employers “probably have little pension experience and are unlikely to turn to advisers for support.”
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