The Pensions Regulator’s Charles Counsell says employers who flout the laws on auto-enrolment do so at their own peril.
Yet a tiny proportion of employers believe the law does not apply to them. Some claim that they do not have the time to become compliant. Others say it is too expensive. Neither argument holds water – and neither argument will be allowed to deny workers the pensions they are entitled to under the law.
We are here to help – but we will take action if an employer is wilfully non-compliant
We have always urged employers to ensure they leave enough time to act, and to ensure they understand exactly what they will need to do to meet their automatic enrolment responsibilities.
We are here to help – but we will take action if an employer is wilfully non-compliant.
In our latest enforcement and compliance quarterly bulletin we have taken the step of naming employers who have failed to become compliant despite having been issued with – and having paid – an escalating penalty notice, in some cases for several thousands of pounds. We have also named those who have refused to pay their penalty notice and where we have had to secure a court order to demand payment.
This is the first time we have done so, and hopefully our action will prompt these and other non-compliant employers to take the appropriate steps to ensure they comply with the law.
The quarterly bulletin reveals a sharp increase in the number of inspections of business premises carried out by our teams to check for compliance. This reflects our drive to validate compliance of employers proactively.
The report also highlights the record levels of fixed and escalating penalty notices that were issued in the first three months of 2017. These increases are in line with the expansion in the number of UK employers who have automatic enrolment responsibilities.
Johnsons Shoes Company
We work with employers as closely as possible to ensure they become compliant and do not run the risk of getting fined unnecessarily.
Unfortunately, some employers decide not to take this option and run up what can be hefty bills.
How employers can learn the lessons of auto-enrolment
With more than 9m new pension savers predicted by 2020, it is fair to say that the aim to get more of the working population to save for their retirement has been a success.
Johnsons, a shoe retailer based in Shepperton, is the perfect example of what an employer should not do.
You can read about the case on our website but, in short, even a £400 fixed penalty notice and repeated warnings that it would be fined a further £2,500 per day was not enough to spur movement.
In the end Johnsons has had to pay more than £42,000 in fines and court costs that could have been avoided if it had simply taken steps to become compliant when it should.
Our message is clear: fail to comply with the law and you may be fined. Fail to pay your fine and we may take you to court.
Charles Counsell is executive director of automatic enrolment at the Pensions Regulator
