A Pension is for life not just for Christmas

Mandatory pension auto-enrolment was introduced in 2012. Under current legislation any jobholder earning more than £10,000 a year and aged between 22 and the state pension age is entitled to be automatically enrolled into a workplace pension scheme. However, it seems the message may not have quite got through to all employers.

In November this year a bus operator based in Manchester became the first employer in the UK to face criminal proceedings for failing to comply with auto-enrolment pension obligations under the Pensions Act 2008. The Company and its Managing Director pleaded guilty to wilfully failing to comply with the law on workplace pensions in relation to thirty-six of its employees. This is the first prosecution of its kind by the Pensions Regulator. The Regulator is also pursuing the Company for £14,400 in civil fines for non-compliance.

2017 has been a busy year for the Pensions Regulator. In the three month period from April to June 2017 it issued more than 4000 fixed penalty notices (a fixed fine of £400) and more than 1000 escalating penalty notices ranging from £50 to £10,000 per day. Swindon Football Club were notably fined £22,900. These figures and the Manchester case are a timely reminder that employers must take these obligations very seriously. Even employers who are currently complying with their obligations should be aware of changes afoot. The current employer contribution rate is 1% of qualifying earnings; however this will increase to 2% by April 2018 and 3% in April 2019.

It is clear that unless employers take the right action, the Pensions Regulator will not hesitate to do so. It is easy to miss what needs doing and we can assist with employer auto enrolment obligations and all other employment contractual matters.

If you have any questions regarding this topic or any employment issue, please contact Linky Trott, or any member of the Edwin Coe Employment team.

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