SME owners urged to check auto-enrolment duties
10th August 2015 | News
The Pensions Regulator has warned small and micro business owners to make sure they are aware of their staging date for auto-enrolment (AE).
This followed research from the pensions watchdog that found less than a third of UK SMEs staging in 2016 accurately knew which date they had to comply by, compared to 79 per cent staging this year.
According to the report, employers’ understanding of their AE obligations was highest among those that had received a letter directly from The Pensions Regulator compared with those that had not.
Previous figures from TPR suggested a steep rise in unpaid contribution notices issued to employers who failed to comply with their AE duties in the last quarter.
The watchdog also admitted last month that it had grossly underestimated the total number of small firms required to auto-enrol during the next three years by more than 500,000.
Charles Counsell, executive director of AE, The Pensions Regulator, said: “It is encouraging that, according to our latest research, most small and micro employers due to stage this year are well underway with their preparations, but there is no room for complacency.
“The challenge of ensuring 1.8m employers meet their duties by April 2018 is significant and the research shows many employers are still not preparing early enough.
“We continue to develop new tools on our website to simplify the process for employers and we are using a diverse range of communications to reach out to employers, but my message to employers remains clear: start getting your plans in place or you risk a financial penalty.”
Employers that fail to meet their AE duties could ultimately face fixed penalty notices of £400. Those who continue to ignore their responsibilities could experience escalating fines of between £50 and £10,000 per day for failing to comply with the initial statutory notice.
Larger companies will receive larger fines than smaller companies, but as yet, The Pensions Regulator confirmed escalating penalties have only been used on a handful of occasions.