The Pensions Regulator is stepping up its auto-enrolment communications to employers of small businesses in a bid to reduce non-compliance.
Over one million employers are due to receive a written warning from January onwards, reminding them of their upcoming staging dates.
Currently, The Pensions Regulator writes to businesses twelve months in advance of their staging dates, but the increased communication is the latest attempt by the watchdog to ensure that employers are clear of their duties and the dates applicable to them.
To date, some five million employees have been auto-enrolled across the UK, although some businesses have fallen short of compliance. In October 2014, the industry media reported that several breaches had been discovered and three employers had been hit with the Regulator’s first fines starting at £400-worth of fixed penalties. Since then, The Pensions Regulator has announced that more than 160 employers were issued fixed penalties of £400 last year.
Commenting on the latest communications increase, Charles Counsell, AE executive director at The Pensions Regulator said: “Automatic enrolment affects every employer in the UK and they need to take timely action to get ready. The roll out of automatic enrolment has so far been a success and this letter will ensure that by the summer all small and micros are clear about when their duties begin, enabling them to plan ahead."
Clare Abrahams, Head of Auto Enrolment at Aon Employee Benefits added that although many employers were taking their duties seriously and undertaking the right steps to prepare and comply, there was still a sizeable number of employers who were appearing to ‘bury their heads in the sand’.
“The Regulator is getting tougher,” she warned. “Employers need to be aware that there will be less sympathy going forward and there will no longer be as many acceptable excuses. Some employers have been auto-enrolling their staff for over two years now! We are likely to see more and more non-compliance notices and fines being issued.”
Summing up, Abrahams said: “Employers should plan ahead. Over a million employers suddenly looking for advice and pension schemes will be quite a strain on the industry. This is why we are seeing more small accountancy firms and bookkeepers approaching us about rolling out our Littleblue 2go product for their clients. Littleblue 2go helps them fill the gap between their pension expertise and the high expectations of the legislation. Their clients then have a readymade product and the right prompts to keep them compliant.”
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