Automatic enrolment: The Pensions Regulator: First quarterly compliance and enforcement bulletin

The Pensions Regulator has published compliance and enforcement details showing how many times it has needed to make use of its formal powers to ensure employers comply with their automatic enrolment duties.

The first of the new quarterly bulletins shows the regulator had used its powers on twenty three occasions up until the end of June this year. The powers listed include the ability to carry out inspections and to issue statutory notices including fixed penalty and escalating fines.

Download the first quarterly automatic enrolment compliance and enforcement bulletin (PDF, 90kb, 7 pages).

Executive director of automatic enrolment Charles Counsell said: “Employers and the pensions industry are understandably interested to know how and when we use our powers. To date the vast majority of employers are complying with their new workplace pension duties without the regulator needing to use our enforcement powers.

“I believe this is a testament to the success of our proportionate, risk-based approach to compliance and enforcement. We target our resources where they will maximise compliance and work with employers to help them comply with their duties.

“We have provided the tools and assistance that large and medium employers need to ensure millions of workers didn’t miss out on the pension contributions they are entitled to. On a small number of occasions, when our intervention has not resulted in the required outcome, we have used our powers to help to ensure employers comply with their duties.”

As the numbers of employers staging and due to complete their declarations of compliance rises significantly over coming months, The Pensions Regulator expects to see a corresponding increase in the number of occasions that we use our statutory powers and issue fines. These figures will be reported in subsequent quarterly bulletins.

We recognise that we need to highlight that there are consequences for those employers who may seek to avoid their statutory obligations in relation to automatic enrolment.

Our compliance and enforcement strategy aims to deter and prevent non-compliance by sharing learning and by ensuring employers understand the challenges they may face complying with their duties. As well as detailing our use of statutory powers, the bulletin also highlights key compliance learning from the first quarter of 2014-15.

The bulletin contains details of a case where an employer was required to backdate pension contributions after failing to meet its duty to automatically enrol. The case highlights the importance of an employer checking their staging date – which is set in law. We also highlight the recent Supreme Court ruling on partners of Limited Liability Partnerships (LLPs). Consequently, we recommend LLPs assess their partners to ascertain whether they are a worker to determine whether they have any automatic enrolment obligations in respect of such partners.

Editor’s notes

  1. Further research and publications relating to automatic enrolment can be found in research and analysis.
  2. The regulator is focused on an educate and enable approach and maximising employer compliance to ensure workers get the pensions contributions they are entitled to. Information on our compliance work aimed at employers can be found in what happens if I don’t comply?
  3. Employers should ensure they plan ahead. The Pensions Regulator recommends employers start planning for automatic enrolment 12 months ahead of their staging date. The staging date is the date set in law and is when an employer’s statutory duties are switched on. Employers can find their staging date using our calculator and ourtimeline planner tool will show them what they need to do and when.
  4. The Pensions Regulator is the regulator of work-based pension schemes in the UK. We have objectives to: protect members’ benefits; reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; and to maximise employer compliance with automatic enrolment duties.

Press contacts

Rebecca Sandles 01273 811870
Ciara Bridge-Butler 01273 662018

www.thepensionsregulator.gov.uk