Auto Enrolment: fail to prepare, prepare to be fined!
Automatic Enrolment requires employers to enrol all eligible workers and make contributions, into a pension scheme by a specific ‘staging’ date. Since it’s introduction in 2012, the proportion of eligible employees enroled into a pension scheme has increased by a fifth to 75% according to The Pensions Regulator.
Source: The Pensions Regulator, 2016
The Pension Regulator’s latest report shows that they have so far received over 200,000 declarations of compliance from businesses who have complied with their Automatic Enrolment duties. The majority of these are large and medium-sized employers who staged from 2012 (large) and 2014 (medium). The deadlines for small (5-49 employees) and micro businesses (1-4 employees) to stage began in 2015 and will continue into 2018.
Encouragingly, over 95% of staged small and micro employers have complied with the regulation. Despite this, action against those who failed to meet their auto-enrolment duties increased by over 300% in 2015-16 compared to the previous year – with TPR issuing 6,241 compliance notices and over 2000 fixed penalty notices to employers.
Up to 459,000 more employers are expected to stage for the remainder of 2016 and in 2017 with 77% of those having less than 10 employees and a third only employing one person. Recent figures by Paycircle suggest that a lack of understanding of the regulation among micro businesses could result in a collective fine of £22 million in the next year if they do not comply.
However, many small businesses are looking to use accountants (31%) and financial advisers (20%) to help them with their Auto Enrolment duties according to a TPR survey. If you would like further help and advice with your workplace pension requirements we are running a series of briefings for those employers approaching their staging date:
- 2nd September (Worthing)
- 11th October (Gatwick)
- 28th October (Worthing)
To speak to one of our Automatic Enrolment experts please contact us on 01903 234094.