Small businesses that are not complying with the automatic enrolment scheme rules are being issued with fines
The Pensions Regulator has said it is handing out increasing numbers of compliance notices and fines, as small businesses fail to keep on top of the Government’s automatic enrolment pension scheme.
The automatic enrolment scheme was introduced by the Government in 2012 to encourage employees to contribute to their workplace pension. The automatic enrolment scheme was initially aimed at larger businesses, but, since last summer, 12,000 small employers, even those that employ only one or two people, must now follow the rules of the scheme.
Employers must automatically enrol employees into their pension scheme if they:
- work in the UK
- earn more than £10,000 per year
- aged between 22 and the State Pension age
The Pensions Regulator has handed out 4,818 warnings to employers since the scheme started in 2012, but 2,596 of these were issued in the last three months of 2015. Employers are given only so long to act upon the compliance notices until they are issued with a £400 fine.
Since Autumn 2012, a total of 1,594 fixed fines of £400 have been issued to businesses that have failed to automatically enrol their employees, even after receiving a warning; an alarming 1,013 of those were handed out between October and December 2015.
Pensions Minister, Baroness Altmann, commented: “So far 5.8 million people have been automatically enrolled into a workplace pension. Thanks to automatic enrolment workplace pensions are becoming the norm and we expect nine million people to be newly saving or saving more.”
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