The Pensions Regulator (TPR) has warned employers to ensure they are complying with their ongoing automatic enrolment (AE) duties. The alert to employers comes as TPR published its latest compliance and enforcement bulletin. The bulletin shows how many times TPR has used its automatic enrolment and frontline regulation powers between January and June this year.
The warning also follows a series of in-depth compliance inspections of more than 20 large employers across the UK, with a total of nearly 1.5 million employees. TPR regularly carries out compliance inspections on employers of all sizes across all employment sectors to ensure they are meeting their workplace pensions duties correctly. Employers are selected for inspections on a risk-based approach including whether they are in a sector with greater risk of non-compliance or where TPR has information which may indicate failure to comply.
While the inspected firms successfully enrolled eligible staff members into a pension scheme and made contributions, administrative errors with their ongoing pensions duties put employees at risk of not receiving the pensions they are due. The firms, which were across the transport, hospitality, finance and retail sectors, have now corrected or are working to correct errors, including making backdated contributions. TPR has elected not to publish any further details on how these errors are being remedied, but it has made it clear that where an employer fails to meet their automatic enrolment duties, it will use its wide-ranging powers to encourage compliance, including issuing financial penalties where appropriate.
Some of the common errors highlighted by TPR include:
- the use of incorrect earnings thresholds which can lead to employers needing to make backdated contributions; and
- miscalculating maternity pay, as this can impact pensions contributions.
Comment
Despite the fact that most of the errors which TPR found are technical in nature, these types of oversights can indicate broader non-compliance issues, so employers should ensure they do not skip important steps in complying with their ongoing duties and consult TPR’s online information on AE (which can be found here). Broadly speaking, whilst employers can still give the re-declaration of compliance on re-enrolment notwithstanding compliance issues, employers should take advantage of re-enrolment as an opportunity to check that their systems are more generally up to date and running smoothly.
