Rising numbers of businesses across Dorset are facing fines for failing to meet their auto-enrolment pension obligations, the Poole office of international accountants and business advisers Mazars has warned.
David I’Anson, partner at Mazars in Poole, warns the Pensions Regulator is predicting many more £400 fixed penalty notices are likely to be issued.
All businesses, regardless of size, have been on a five year timeline, with “staging dates” to have suitable arrangements in place so as to allow eligible workers to be automatically enrolled in a qualifying pension scheme.
Mr I’Anson said: “The first deadline was October 2012 for companies with over 120,000 employees. Now the crunch is here for small and medium sized firms.
“SMEs have had numerous warnings that this was coming down the road, with the Pensions Regulator writing to employers around 12 months before their staging date. But some have still chosen to ignore it, presumably hoping it would go away. The process has now reached businesses with less than 60 employees – employers must allow enough time to prepare. If they don’t, they risk an unnecessary fine.”
Employers with fewer than 50 employees will be staged between June 1, 2015 and April 1, 2017. All businesses in the UK must be compliant by 2018 at the very latest.
Data from the Pensions Regulator shows that in the last quarter of 2014, it served 166 firms across the country with fixed penalty notices for some form of compliance failure – a significant increase on the three issued in the previous three months. The regulator also posted 1,139 compliance notices, which instruct an employer to remedy a contravention of one or more of their duties or risk a fine or further action.
However, the vast majority of employers have met their responsibilities. Approximately 30,000 medium-sized firms – each with around 62 to 149 workers – with staging dates between April and July had reached their compliance deadline by December 1.
David I’Anson added : “The Pensions Regulator’s automatic enrolment director, Charles Counsell, has stated he expects further fines to follow over the next few months as more small employers reach their deadline for putting the new rules in place. A significant number of notices sent out towards the end of 2014 were to employers that had missed this deadline, which comes five months after staging date.
“The vast majority of employers are completing their duties on or ahead of time, but a small minority requires an additional nudge. And undoubtedly some of those will end up getting fined.
“The message to SMEs is – get prepared now. This is not optional; you must comply. Pick up the phone – we can help you.”
Auto-enrolment is part of the Government’s wider reorganisation of the pensions system given that many people have so far made inadequate provision for their retirement.