Numbers Set To Rise Dramatically As More SMEs Reach Staging Date
The doubling of auto-enrolment breaches since the start of 2014 is a stark reminder of what is around the corner now that thousands of SMEs have passed their staging date, say a leading pensions expert.
The warning from Nigel Bolton at national law firm Irwin Mitchell, follows a Freedom of Information request by Creative Auto Enrolment to The Pensions Regulator (TPR).
The request revealed that since the start of the year, the proportion of AE non-compliance investigations resulting in possible breaches has risen from 23 per cent to 47 per cent.
Nigel Bolton, Pensions Partner at Irwin Mitchell, said:
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These are worrying figures because it shows that nearly half of all firms facing investigations could face sanctions.
“Although these figures include investigations up until August, they will not include SMEs. These smaller companies are at far greater risk of non-compliance due to their lack of specialist back office functions and the expected shortage of advisers that will be able to ensure businesses meet all of their AE obligations.
“In the next six months I expect the number of investigations will shoot up, as will the number of breaches.”
Nigel Bolton - Partner
The latest statistics follow an announcement last week by the Chairman of TPR which said that a lack of preparation amongst SMEs when it comes to Auto-Enrolment is unacceptable and warned that those that fail to comply will be punished.
Speaking at the National Association of Pension Funds annual conference, TPR Chairman Mark Boyle warned that as the number of employers that stage for Auto-Enrolment rises significantly, so too will its use of statutory powers such as compliance notices, fixed and escalating penalties.