Did you know that the number of businesses fined by The Pensions Regulator for pension auto-enrolment erroes has risen 144% in the past year?

35,810 businesses were fined for pension auto-enrolment errors in 2017/18 compared with 14,650 in 2016/17. Total fines reached £42 million in 2017/18, up more than threefold from £12.6 million in 2016/17.

The rise in the number of fines is due in part to expansion of the auto-enrolment pension regime to cover small businesses of fewer than 50 employees.  (Prior to these changes only large and medium-sized businesses were required to auto-enrol staff into a pension scheme.)  The complexity of auto-enrolment schemes means smaller businesses without in-house HR functions are at risk of making errors when attempting to auto-enrol staff, and that the rise in fines does not necessarily mean employers are deliberately avoiding auto-enrolling staff.

  

From 6/4/19 new pension contributions come into effect, so it’s timely to have a review of your practices.

With this in mind, here are a few questions for you to reflect on, to ensure that your processes cover the requirements:

  • Understand the difference in the automatic enrolment date and postponement date?

  • Monitor the ages and earnings of your staff to ensure correct auto-enrolment?

  • Manage requests to join or leave (opt-out of) the scheme?

  • Keep records for six years (including names/addresses of those you’ve put into a pension scheme; when money was paid into the pension; requests to join/leave; pension scheme reference or registry number)?

  • Make payments due into the pension scheme each time you run payroll?

  • Have specialist payroll software to calculate pension payments you need to make on behalf of staff; alternatively, do you need to pay an accountant for the service?

  • Provide regular updates to The Pensions Regulator (TPR)?  Failure to provide regular salary updates and data submissions on employees is regarded by TPR as non-compliance and can result in substantial fines.

  • Understand the contribution increases that take effect 6 April 2019?  From this date, employers must pay a minimum of 3% of a portion of staff’s earnings into their pension.  Total combined payments made by the employer and employee must be no less than 8%.

Has this note prompted any questions or concerns?  If so, please contact us and one of our Expert HR team and we’ll be pleased to help.

Phone: 01932 874 944

Email: info@peoplebusiness.co.uk