The Pension Regulator has gone from collecting £22,500 to £53,768,808 in 5 years
Bryan Stott, Corporate Consultant for workplace pensions comments on The Pension Regulator crackdown.
Yes those figures are correct, if only it was my pension fund! I would not be penning this article but sipping my pina colada on my yacht moored in a secluded bay in the Caribbean.
The £22,500 was the total amount collected by the Pension Regulator in Escalating Penalty Notices fines in the year ending March 31st 2015, this figure had grown to £53,768,808 (subject to audit) in the year ending March 2019. These figures were released by the pension regulator under a freedom of information request.
When Pension Automatic Enrolment started in 2012 it was the most radical and most complicated pension legislation ever introduced in the UK, and meant that every employee in the UK, had to set up a pension scheme and enrol eligible employees into the pension scheme. Part of the legislation reminded me of that dance the oke-cokee, as employees were put in, could opt out, be put back in then opt out, this dance would happen every 3 years.
The pension regulator very kindly put together a series of guidance notes for employers, these notes ran to over 300 pages, having been involved in setting up over 1,000 Automatic Enrolment schemes, I have yet to meet an employer who read the guidance notes, please contact me if you did (no prize, but it would be good to know I was not the only person to read these).
What has gone wrong? Nothing in the government`s view as figures released in May 2018 estimated 9.5 million had been auto-enrolled into a pension scheme and it is estimated that 10 million will be the total auto-enrolled by the end of 2019, add to that the £124 million collected in fines as at March 2019 since Automatic Enrolment began, and I would agree that from a government point of view this has been a success.
When Automatic Enrolment was first introduced my dealings with the Pension Regulator led me to believe that the legislation would be policed on a low key basis, and the regulator would help employers to fix things if they got them wrong, but I recently attended a webinar hosted by the Pension Regulator, and was surprised that the opening statement implied that they were now going to take a heavy hand to any employer who was getting things wrong.
As part of my role at Wren Sterling I have conducted many Automatic Enrolment audits and have yet to find any employer 100% compliant. The main reasons being the person who installed the auto-enrolment scheme left and there was no hand over to the new administrator, communications were not compliant (and often not issued on time) and records were incomplete.
The pension regulator is visiting 100 companies a month, so with 1.5 million employers with Automatic Enrolment schemes, the chances of a visit from the Pension Regulator are slim. But if the regulator did come knocking are you ready to be inspected, and would you pass the inspection, or would you be another employer being fined?
If you’re concerned about your Automatic Enrolment compliance, speak to Bryan Stott for a free initial consultation.
All Bira members benefit from an auto-enrolment pension scheme with guaranteed acceptance.Find out more about Bira Workplace Pensions
Please note, Automatic Enrolment is not regulated by the Financial Conduct Authority.