The Pensions Regulator takes action on non-compliance

The Pensions Regulator (TPR) publishes annual and quarterly commentary and analysis on automatic enrolment and the powers they have used to ensure employer compliance over the relevant period. The data gives a breakdown of which of the several compliance enforcement actions have been applied. The analysis and data published in the TPR June 2015 report tells us that:

• The power to demand information and documents under section 72 of the Pensions Act 2004 was used 5 times in the last quarter and 36 times in the last year.
• Inspecting – the power to inspect premises under section 74 of the Pensions Act 2004, was used 5 times in the last quarter and 13 times in the year.
• Executing a Warrant – the power to search premises and take possession of content under section 78 of the Pensions Act 2004 had not yet been used in the last year, according to the June 2015 TPR published Information Notice.
• Issuing a Compliance Notice – under section 35 of the Pensions Act 2008 to remedy a contravention of one or more automatic enrolment employer duty provisions, was used 119 times in the last reported quarter and 1,295 times in the last year.
• Issuing an Unpaid Contributions Notice under section 37 of the Pensions Act 2008 to remedy a late or non-payment due to a qualifying pension scheme, was used 50 times in the quarter and a total of 71 times in the last year.
• Issuing a Fixed Penalty Notice under section 40 of the Pensions Act 2008 of a fine of £400 for failure to comply with a statutory notice or some specific employer duties, was used 68 times in the last quarter and on 332 occasions over the last year.
• Issuing an Escalating Penalty Notice, under section 41 of the Pensions Act 2008. The penalty ranges between £50 and £10,000 per day (depending on size of the employing organisation) for failure to comply with a statutory notice. This compliance penalty has not been used in the last quarter, and only four times over the last year.

The total recorded TPR non-compliance interventions, or imposed penalties for the quarter up to June 2015, was 247 contributing to a total of 1,751 for the year. The number of TPR actions to tackle non-compliance is going up and is likely to increase significantly as more smaller businesses take on auto-enrolment. Watch out for a significant short-term increase in the issuing of Fixed and Escalating Penalty Notices!

Every employer with at least one member of staff now has new responsibilities, including putting those who meet certain criteria into a workplace pension scheme and contributing towards it. There are very few employment situations where the auto-enrolment requirement might not apply to an employer, so if you are unsure if your business is liable, check and seek advice, rather than assume or claim that auto-enrolment is not required in your case.