Pension Auto Enrolment is now in full force.
The largest employerss in the UK have now gone through the process of introducing pension plans for all eligible employees.
Of the 100 largest firms, 87 made errors in their procedures, which highlights the difficulty facing small and medium sized employers when they have to go through Auto Enrolment themselves.
So what happens if you get it wrong?
“The Pension Regulator will tell employers when their staging date is and provide guidance and information about the employer duties”.
“They will have the power to impose penalties on employers who fail to comply with their duties”.
If premiums to plans remain unpaid past the employers staging date, the following fines will apply:
|Type of infringement||Penalty|
|Unpaid Contributions||Fixed Penalty Notice – £400The employer will have 4 weeks to put things right.
The employer will face a daily escalating penalty in addition to the fixed penalty based on the number of people affected by the unpaid contributions.
Number of people Daily Rate
500 or more £10,000.00
|Wilful failure to comply||Employers who wilfully fail to comply with their employer duties face fines and / or up to 2 years imprisonment.|
|Inducements||Employers who induce workers not to join or to opt out of a pension scheme may have fixed and / or escalating penalties imposed.|
Prohibited recruitment conduct
|Employers are not allowed to make any statement or ask any question during the recruitment process which indicates that the worker may not join or may opt out of a pension scheme.Number of people Daily Rate
250 or more £5,000.00
Employers need to think, What will be the true cost of delay?
If you would like to talk to an adviser about your responsibilities as an employer, please don’t hesitate to contact us.