Naming and shaming - the new AE reality
So The Pensions Regulator has started to name and shame employers that do not meet their auto enrolment obligations. The worst 20 offenders were given escalating penalty notices (EPNs) and fined over £220,000.
More than 4,673 fixed penalty notices of £400 for automatic enrolment non-compliance were issued in the first three months of 2017, up from 2,919 the previous quarter – the largest total issued to date.
Auto enrolment was introduced in 2012 and is a mandatory pension compliance system for employers; they must provide auto enrolment pensions and contribute to them, while employees can opt out if they wish.
Charles Counsell, The Pensions Regulator’s executive director of automatic enrolment, said: ‘Employers who wilfully refuse to become compliant should be in no doubt that we will take enforcement action against them, as these lists show.’
Following a recent study, Chase de Vere, a firm of financial advisers claims that the administrative burden is the biggest problem for companies when trying to implement auto enrolment.
Nearly four in 10 (37%) of employers surveyed highlighted the huge amount of admin as the main reason for not getting things sorted, while another 23% complained about the cost of providing auto enrolment pensions for their staff.
Just 5% of those polled used an accountant to advise on setting up auto enrolment, while 62% opted to manage pension administration in house, compared to 11% who used payroll services or an accountant.
Sean McSweeney, corporate advice manager, Chase de Vere, warned: ‘Costs will rise for many employers as minimum contribution levels are increased in April 2018 and again in April 2019.’