Date:

Sharp rise in the number of auto-enrolment fines issued by the Regulator - is this a trend?

Figures from the Pensions Regulator’s recent quarterly bulletin reveal an alarming rise in the number of non-compliance fines issued, during the first three months of the year. 

A total of 198 fixed penalty notices were issued to employers over the three month period for failing to meet deadlines or comply with their statutory communication requirements. This figure dwarfs the total 169 fixed penalty notices that had been handed down since the introduction of auto-enrolment in July 2012.

The Regulator also issued its first four escalating penalty notices to employers for failing to comply with a statutory notice. These escalating penalty notices are set at a daily penalty charge of between £50 and £10,000 and are seen by the Regulator as a measure of last resort where other compliance approaches have been exhausted.

In addition, the Regulator continued to make extensive use of their other enforcement powers during the quarter. 15 information notices were issued, demanding disclosure of information and documents, bringing the total number issued to date to 31. Moreover, 213 compliance notices and 9 unpaid contributions notices were also issued bringing the total issued to date to 1,529 and 17 respectively.

Whilst these figures suggest the Regulator is taking a firm stance on non-compliance they paint a concerning picture of an increasing number of employers not meeting their statutory obligations under auto-enrolment. As 1.2 million small and micro employers (those with less than 50 employees) commence staging over the next three years, there is wide speculation that there will be an explosion in these non-compliance figures and sanctions. The Regulator is not blind to this and has taken steps to ease the administrative burden on small employers, recently launching the automatic enrolment guide to help business advisers assist their employer clients and reducing employer’s communication obligations. The Regulator, policy makers and others more broadly working within the pensions industry will be hoping that these initiatives and publicity in relation to activity of the Regulator will drive compliance and check the trend.

If you have any questions or would like more information, please contact one of our pensions specialists below.

Author: Tony Holloran

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Pensions Law

The complexities of the pensions world involve governance issues and ever-changing legislation. Managing funding costs and risks is only part of the challenge you face.We can help you go further with a range of products, training and sector expertise.

Read more

Colin Greig

Partner

I am a Partner specialising in pensions law.

Tim Green

Partner - Head of Pensions

I am a Partner in the Pensions team with a broad advisory, transactional and dispute resolution practice.