The Pension Regulator has published the latest auto enrolment report containing the most recent figures on how employers are meeting their new legal duties. An increasing number of smaller employers are now coming up to the date when they are required to automatically enrol their staff into workplace pensions (their staging date). Up to 500,000 small and micro employers are due to stage in 2016, with 87,000 filing Declarations of Compliance in January 2016.
Did you know that The Pension Regulator has now issued over fifteen hundred £400 fixed penalty notice fines to employers. The Regulator has issued the following statement:
“Our research shows that most employers want to do the right thing by their staff but that smaller employers are more likely to leave things to the last minute. They therefore need a “nudge” to encourage them to meet their duties.
A minority still don’t comply after receiving a notice of non-compliance, but many do after receiving a fixed penalty of £400. As we deal with smaller employers, it is expected there will be more who, despite the message to prepare early, leave it too late or don’t act at all. We take this very seriously….”
Risks to consider
Failing to comply with regulations: Small businesses who do not meet their auto-enrolment obligations in time, or are offering pensions which do not comply with regulations, can be hit with fines of up to £500-a-day (£10,000 for large businesses).
Not budgeting properly: Unsurprisingly, the risk of not adequately preparing for auto-enrolment could see firms landed with pension bills they cannot afford, meaning cutbacks may have to be made elsewhere. Planning early is the way to avoid this added expense.
Encouraging staff not to join: Employers are banned from offering incentives to their workers to opt out of an auto-enrolled pension. They are also not allowed to refuse to employ someone because they want to join the company pension scheme. The Pensions Regulator provides a whistleblowing facility to combat this and may issue penalties to those firms found breaching these rules.
How can Magma Help
If you are an employer and you have not yet auto enrolled you need to urgently review your current pension scheme arrangements (if any) and consider how the new regulations will affect you. Once you have done this you need to implement a chosen strategy and establish processes for ongoing compliance.
The introduction of the new regulations will for many employers result in increased pension and employment costs, together with an additional administrative burden.
Magma have a specialist team who are able to assist with all aspects of automatic enrolment reporting and submissions. We offer advice on all aspects of payroll including workplace pension schemes and the new auto-enrolment regulations, taking away this additional burden and the worry of complying with the new regulations from employers.
If you would like to discuss this further please contact Alison Snook, Senior Business Services Manager, on 01788 539000.