2nd May 2016

Legal Issues – The Important Wake Up Call for Employers to Ensure They are Complying with Their Pension Obligations

As more employers approach their auto-enrolment staging dates under the Pensions Act 2008, it is becoming increasingly important for employers to be aware of their obligations and to ensure they are complying with the requirements set by the Pensions Regulator.

Recently Swindon Town Football Club were fined £22,900 for non-compliance and repeated failures of their auto-enrolment duties. The club were issued with a compliance notice in August 2014. This required the club to automatically enrol staff and pay pension contributions, but the club did not meet the deadline set.

Despite repeated attempts to encourage the club to remedy their failures, the Pensions Regulator had to take enforcement action against the club, resulting in a hefty fine due to their unsatisfactory compliance. The club’s non-compliance included not enrolling staff into a suitable pension scheme from their staging date, failing to pay pension contributions and failing to notify staff of how auto-enrolment would affect them.

The penalty given demonstrates to employers that the Pensions Regulator will not tolerate deliberate non-compliance and that they will use their legislative power for enforcement action. The penalties imposed by the Pensions Regulator can prove costly to employers. Not only can fines be imposed but employers will also be required to pay backdated contributions.

It is therefore important for employers to be clear about their auto-enrolment staging dates, their pension obligations and to seek advice from specialist pension providers or advisors to ensure they are fully compliant. If employers are struggling to comply with their pension duties then they should contact the Pensions Regulator and discuss any problems they may be experiencing.

2nd May 2016