New research has shown that thousands of firms might have missed their Automatic Enrolment deadline, potentially leading to large fines and employees missing out on valuable pension contributions.
Figures from the Pensions Regulator show that so far 15,099 firms have complied with the Automatic Enrolment legislation. However, research from Hargreaves Lansdown shows that 22,940 firms should have reached their Staging Date by 1st May, leading to concerns that thousands of businesses have failed to comply and thousands of workers are missing out.
There could be a number of reasons for the shortfall:
Our advisers can help you make the right decisions
Contact our team of advisers today:
0115 933 8433
- Firms might actually be compliant, but have not yet confirmed to the Pensions Regulator that they have hit their Staging Date
- It is possible that firms plan to comply with the legislation but have experienced delays
- Alternatively, a small minority of firms may have chosen to disregard the legislation and will refuse to comply
Big fines for non-compliance
Any firms not complying with the legislation will ultimately face large fines.
Initially the Pensions Regulator will issue a warning notice, informing the firm that they are not compliant; this will be followed by a £400 fixed penalty. If the firm is still uncompliant they will be subject to daily fines, which rise depending on the size of their business:
- 1 – 4 employees: £50 per day
- 5 – 49 employees: £500 per day
- 50 – 249 employees: £2,500 per day
- 250 – 499 employees: £5,000 per day
How can avoid missing your deadline and getting a fine?
There are some simple steps your business can take to ensure it meets the Staging Date and therefore avoid action from the regulator.
Remember to tell the Regulator you have complied This sounds like basic common sense doesn’t it? But given all the other tasks you have to complete to meet your Staging Date, it is perfectly possible that some employers will forget to tell the regulator that they have complied
Don’t underestimate the work involved Complying with the legislation isn’t easy and will take a large amount of your time, alternatively you could outsource it to a suitable expert. Either way you have some big decisions to make:
- Who are your workers?
- Which workers do you need to automatically enroll? Remember some are exempt
- Should you postpone?
- What definition of earnings should you use?
- Which pension provider is best?
- How do you communicate with your employees?
This isn’t going away It is clear the Government is committed to making Automatic Enrolment a success; if you are hoping that you won’t have to comply because the rules will change you are in for a disappointment. This isn’t going away and you should set aside enough time and resources to deal with it.
Plan carefully The firms who have successfully met their Staging Date will have planned carefully, so they could fit the tasks involved with complying, into the day to day routine of running their business. It’s not as if you can ‘down tools’ and concentrate on pensions for a few weeks!
It’s never too late! If you are one of the firms who are close to their deadline and have done very little it’s never too late. Ideally you should leave at least six months to comply with the rules, but we have successfully helped firms comply with just four weeks to go.
We are here to help
Complying with your Automatic Enrolment obligations is complex and time consuming.
Whether you have a simple question or would like to learn more about how we can help you comply, get in touch our team of advisers are here to help.
Give us a call today on 0115 933 8433 or email info@investmentsense.co.uk
