Workers aged between 22 and state pension age who earn more than £10,000 a year must be automatically enrolled by their employer into a workplace pension, although workers can opt out. Employers have a legal duty to complete a declaration of compliance showing that they are meeting their automatic enrolment obligations. This declaration must be submitted using The Pensions Regulator’s online service.

Providing The Pensions Regulator (TPR) with false or misleading information on a declaration of compliance may result in fines or court action. Initially, TPR usually issued fixed penalty notices of £400, with escalating penalty notices issued at a daily rate of £50 to £10,000 for continued failure to comply, depending on the number of staff in the business. However, a healthcare provider was recently fined £20,000 for providing false or misleading information and wilfully failing to comply with its auto-enrolment duties.

TPR has announced that employers suspected of providing false or misleading information about how they are meeting their automatic enrolment duties will be subject to short-notice inspections. This will also include checking employers who are suspected of failing to put staff in a pension scheme, encouraging workers to opt-out or making no or incorrect pension contributions. Spot checks will also target employers who are still non-compliant despite penalty action, or who TPR believes are at risk of becoming non-compliant in the future. Previous rounds of spot checks targeted employers by region, from at-risk business sectors and from random test samples. Employers will generally be notified about an inspection a few days in advance of TPR’s visit. Refusing to provide information when required or obstructing an inspector are criminal offences and may result in further legal action or fines.

In addition to these spot checks, TPR will be contacting other employers suspected of non-compliance by phone to validate the information submitted in order to ensure they are complying fully with their auto-enrolment duties.

It is therefore vital that employers undertake regular checks to ensure that they are complying with their auto-enrolment obligations and that all relevant records are up to date. The number of fines issued by TPR is increasing. TPR closed 21,372 auto-enrolment cases in the first three months of 2019. Fines in 2018/19 amounted to over £68 million with around £14.9 million coming from fixed penalty notices and £53.8 million from escalating penalty notices.

We have expertise in helping employers meet their automatic enrolment obligations and in successfully defending fines issued by TPR.