On the go: The Pensions Regulator is warning employers not to avoid their pension duties after one company ended up with a £350,000 fine.
An anonymous case study in the watchdog’s quarterly compliance and enforcement bulletin, published on Thursday, showed that despite regulatory warnings, the employer allowed an escalating penalty notice to grow before correctly re-enrolling staff into its pension scheme and paying the right contributions.
The London-based business, which has 5,000 employees, has now re-enrolled more than 40 staff and paid more than £100,000 of backdated pension contributions following TPR’s intervention.
The employer also ensured ongoing contributions are correctly calculated and paid. The re-enrolment failure and incorrect contributions affected more than 2,000 employees. Both oversights will be covered by the backdated payments, which are in addition to the fine.
Darren Ryder, the regulator’s director of auto-enrolment, 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.”
He added: “We do not want to fine businesses, we want them to meet their legal duties and we are here to help them do this.”
This case demonstrates how important it is to carry out both ongoing duties and re-enrolment correctly, Mr Ryder said.
“We 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 regulator’s bulletin highlighted that as part of the watchdog’s new supervision approach, it is finding high standards and well-run schemes.
