The Pensions Regulator (TPR) is warning employers that they face hefty fines if they fail to fully comply with their pension duties after it fined a business £350,000 for not automatically enrolling employees into its pension scheme.
The large London-based organisation allowed an Escalating Penalty Notice from TRP to grow before correctly re-enrolling its employees into the company pension scheme and paying the correct contributions.
Under automatic enrolment rules, employers must offer eligible workers a workplace pension and make at least the minimum contribution to the scheme.
The anonymous case study was published in TRP’s quarterly compliance and enforcement bulletin to serve as a warning that employers who fail to address problems early can face significant fines.
Following TRP’s intervention, the business has now enrolled more than 40 employees and paid more than £100,000 of backdated pension contributions for them. It has also pledged to ensure that ongoing contributions are correctly calculated and paid.
As a spokesman for the regulator commented, TRP does not want to fine businesses but to help them to meet their legal duties. He added that a fine of this size is rare because the vast majority of employers now consider auto-enrolment to be an everyday part of running their business.
The piece in TRP’s bulletin also underlines how important it is for employers to carry out both ongoing duties and re-enrolment correctly. The regulator will always take action to ensure that business employees receive the correct contributions on an ongoing basis.