First Auto-Enrolment Compliance Failure Serves As 'Wake Up Call' For Smaller Firms

Latest Revelation Shows That Regulator Is Not Afraid To Act

14.08.2013

By David Shirt

The Pensions Regulator’s confirmation that it has issued its first compliance notice to an employer for failing to meet its auto-enrolment obligations will serve as a wake-up call for unprepared SMEs, says a leading pension lawyer.

Launched in October 2012, auto-enrolment makes it necessary for all UK employers to place all ’eligible jobholders’ into a qualifying pension arrangement. All employers are obliged to contribute to that pension arrangement and monitor their workforce, as well as keep records of their workforce’s membership of the scheme. 

The laws came into effect for the UK’s largest businesses last year and from April 2014, firms with a PAYE scheme size of between 249 and 160 will need to be ready. Firms with fewer staff members will be required to comply with the rules by a particular ‘staging date’ according to their size up until 2018.
 
The latest statement by the Pensions Regulator follows news last month that a total of 89 investigations had been launched into possible non-compliance. The compliance notice that it has served makes it necessary for the unnamed organisation to take specific remedial action.

Nigel Bolton, partner at national law firm Irwin Mitchell, said: “Once again this shows that the Regulator isn’t afraid to act. It reveals how challenging these laws are for larger well-resourced businesses and highlights what lies ahead for SMEs. It will no doubt be a wake-up call for many smaller companies that are awaiting their staging date.

“Our own research found that, although the majority of SMEs thought that they were ready for auto-enrolment, in actual fact they hadn’t considered many of the key issues. Hopefully this latest announcement will ensure that they begin to take appropriate action.”

The findings from Irwin Mitchell’s auto-enrolment survey can be downloaded here

The Pensions Regulator has said that further detailed information on compliance and enforcement will be published in the future.