Between 2010 and 2011, all employers will be contacted twice by TPR: once when TPR will explain the duties employers will have in relation to auto-enrolment and NEST; and subsequently to provide the employer with its “staging date” from which the new employer duties will apply.
Employers’ duties are outlined in the Employers’ Duties (Registration and Compliance) Regulations 2010 (SI 2010/4) and include the following:
- Registration - Employers will be expected to register with TPR within 6 months of their “staging date”. Registration will require employers to provide details about jobholder numbers, auto-enrolment numbers and non-NEST pension schemes. There is also a requirement to re-register and re-enrol jobholders every three years.
- Record keeping - Employers will be required to keep records on auto-enrolment numbers, opt-in and opt-out policies and contribution levels for six years. The DWP has stated that, where there is an occupational pension scheme which is a qualifying scheme, one set of records can be kept between the employer and the trustees of the pension scheme.
- Late payment of contributions - TPR will have the power to direct employers to pay contributions that are overdue by three months and will be able to impose interest on this amount.
TPR will be responsible for taking action against employers who contravene their duties and its first recourse will be issuing a compliance notice requiring the employer to remedy the failure. Should an employer fail to comply with a compliance notice, TPR will be able to issue a fixed penalty notice (currently £400). For persistent breaches, escalating penalties of between £50 and £10,000 per day may be issued, which will vary according to the size of the employer.
The Pensions Act 2008 prohibits employers from requiring a prospective employee to opt-out of NEST (or enquiring whether an employee will do so). In addition, employers are prohibited from offering employees a financial inducement to opt-out of any existing workplace arrangements.
The Pensions Act 2008 also provides that any employer who wilfully fails to comply with certain key duties (auto-enrolment, re-enrolment, opt-in rights of jobholders) will be guilty of an offence, liable on conviction to imprisonment, a fine or both.
On 21 April 2010, TPR issued what it describes as “straightforward guidance” for employers on their new duties in relation to workplace pension reforms.
View the NEST Rules. (pdf 358.89)
View the DWP’s accompanying notes. (pdf 25.86kb)