A recent Freedom of Information request has resulted in The Pensions Regulator disclosing some eye-opening figures regarding its auto-enrolment compliance regime. The Regulator has confirmed that, between the date on which auto-enrolment obligations came into force (1 October 2012) and 31 January 2014, 590 investigations have been made into suspected breaches of the regime. This is a sharp increase on the 89 investigations reported as having taken place in the period to 31 March 2013.
There may be some comfort to be taken by the fact that the 590 "investigations" also included instances where information was provided to smaller employers who had contacted the Regulator with a view to arranging early auto-enrolment, but the message remains clear: the Regulator will act where it suspects that a breach of the law is likely to occur or, indeed, has occurred. The Regulator stated that 134 instances of non-compliance had been recorded, and these were dealt with as follows:
- 28 instructions were issued to employers by telephone, email, letter or in person to companies at risk of non-compliance;
- 101 warning letters were sent out in respect of minor alleged breaches;
- 4 compliance notices were issued (3 of these were issued to employers which had not completed registration; the fourth was in respect of an employer's failure to establish a scheme);
- one unpaid contributions notice was issued in December 2013; and
- a statutory inspection of an employer took place in October 2013.
With an estimated 32,000 medium-sized employers (i.e. those employers with 50-249 workers) expected to reach their staging date in the 12 months from 1 April 2014, it is imperative that employers have a plan in place for meeting their auto-enrolment obligations in plenty of time, particularly in light of recent warnings from the industry that some pension providers will simply not assist with setting up an employer's new pension arrangements if it has left it too late. Although the Regulator has not yet issued any fines for non-compliance, it is within its power to levy a penalty on employers of up to £10,000 a day.