The latest Compliance and Enforcement Bulletin from the Pensions Regulator (TPR) makes interesting reading as it sets out cases and the powers TPR have used relating to automatic enrolment and associated employer duties.
TPR are warning employers that ignoring TPR penalties could seriously damage a business’ reputation.
TPR are maintaining a tough approach towards those employers who try to get away with not giving their staff the pension that they are due. The latest development is to publish details of those who have paid their Escalating Penalty Notice (EPN) but remain non-compliant. We will also publish the details of those who failed to pay their EPN, and as a result have been made subject to a court order.
The details published will include the employer’s name, the penalty amount, and the first part of their postcode.
Internet links: TPR Bulletin EPN employer details
The Department for Work and Pensions has confirmed the thresholds for pensions automatic enrolment for 2017/18.
The main qualifying threshold or ‘trigger’ for employees to be automatically enrolled will be maintained at £10,000 per annum. The lower limit of the qualifying earning band and will be £5,876 and the upper limit £45,000.
The written statement also includes:
‘Automatic enrolment has been a great success to date with almost 7 million people enrolled by more than 293,000 employers. It will give around 11 million people the opportunity to save into a workplace pension and we expect this to lead to around 10 million people newly saving or saving more by 2018, generating around £17 billion a year more in workplace pension saving by 2019/20.’
With over a million micro (1 – 4 employees) and small (5 – 49 employees) employers reaching their staging date for auto enrolment in the last quarter of 2016/17 and throughout 2017/18 it is important to ensure employers comply with their obligations. The Pensions Regulator has confirmed the exceptions which apply to employers which can be found at on their website (see the TPR link below).
Please contact us if you would like help with auto enrolment compliance or to determine whether or not your business is exempt from auto enrolment.
Internet links: Parliament written statement TPR exemptions
More than 90% of the first small employers required to put their staff into a workplace pension have now complied with the law.
Around 12,000 small and micro employers became subject to the new legal requirements last summer and the vast majority have put their eligible staff into a pension. For the small numbers that did not comply, the Pensions Regulator (TPR) used their powers of enforcement action.
Although compliance with the rules remains the norm, TPR has noted that smaller employers are more likely to leave things to the last minute and they are therefore more likely to receive a compliance notice which could lead to a fine.
Since the start of auto enrolment:
- 4,818 compliance notices have been issued
- around half of these (2,596) were issued between October and December last year
- a total of 1,594 £400 Fixed Penalty Notice fines have now been issued to employers
- just over a thousand (1,021) Fixed Penalty Notices were issued in the last quarter of 2015.
Compliance notices act as a warning and give employers a deadline to meet their duties and avoid a fine.
If you would like details on what you are required to do as an employer to meet your auto enrolment obligations then please get in touch.
Internet link: TPR press release
With two Budgets in 2015 it does not feel like that long ago since we last had a Budget but the next one is not that far away and will take place on Wednesday 16 March 2016. Ahead of the Budget the CBI have written to the Chancellor outlining what they would like to see in the Budget proposals.
The CBI emphasise that businesses have suffered sizeable policy costs which impact on their ability to remain competitive. These include the Apprenticeship Levy, the National Living Wage and also pension auto enrolment. They therefore want the government to provide additional tax incentives to promote productivity and the delivery of jobs. Examples would include:
- new capital allowances for investments in structures and buildings
- allowing smaller companies claiming research and development tax credits to be able to claim repayments in part payments throughout the year rather than yearly
- introducing a payroll incentive to help small firms with the costs of hiring high-skilled staff along the lines of the Employment Allowance.
We will keep you informed of pertinent Budget announcements.
Internet link: CBI
The government has announced the introduction of a new National Living Wage (NLW) for working people aged 25 years and above.
The NLW is effectively another higher age band of the National Minimum Wage (NMW). Initially the NLW is set at 70p above the current NMW, although this will fall to 50p when the NMW increase comes into effect in October 2015. Further increases are to be recommended by the Low Pay Commission in order to achieve the government’s objective of reaching 60% of median earnings by 2020. This means that NLW increases will be independent of the NWM wage increases for each age band that are made annual in October.
The impact on small businesses
Ian Bryan, Head of Business Services, said: “The additional funding needed to cope with increases in wages with the introduction of the National Living Wage is likely to preoccupy many small business owners, particularly in conjunction with the recent onset of Auto Enrolment.”
“The impact of the National Living Wage will vary significantly across different sectors, with small shops, hospitality firms, retailers and care providers, in particular, facing real challenges in affording the additional expenditure. It is therefore vital that, in a time of increasing costs and pressures to maintain margins, that you seek sound and proactive financial advice.”
For more information on how Hawsons can help, please contact Ian Brian at firstname.lastname@example.org or visit our Business Services page.
The Pensions Regulator (TPR) has launched a new step-by-step guide to help small businesses get ready for their automatic enrolment duties.
According to TPR the online guide has been written specifically for employers with between one and 50 staff.
The guide which is broken down into 11 steps, considers the legal requirements and what employers need to do to comply with their obligations.
Executive director for automatic enrolment Charles Counsell said:
‘We are determined to do all we can to reach out to all small and micro businesses preparing for their automatic enrolment duties. We want to make the process as simple as possible so that employers can avoid the risk of non compliance.’
‘Our new online 11-step guide is a key part of a wide package of measures we are rolling out to give more than a million employers all the information they need, written and produced in a way they makes sense to them.’
‘Our message to employers is ensure you know when your automatic enrolment duties begin and start planning in good time. The regulator’s website should be the first port of call for all employers and their advisers as it offers essential information about each task an employer will need to accomplish in order to comply and avoid penalties.’
If you would like help with Auto Enrolment please do get in touch.
Internet links: step-by-step guide Press release
The Pensions Regulator (TPR) is to write to all small and micro businesses in the coming months as part of a new campaign to give them key information on auto enrolment, including when the duties affect their businesses.
In addition the auto enrolment qualifying earnings bands and earning thresholds have been announced for 2015/16. These thresholds are relevant to employers complying with their automatic enrolment obligations to enrol and then make pension contributions for eligible employees. Employers must meet their obligations from their staging date which can be found by using TPR Website tool.
The revisions in the limits take effect from 6 April 2015 and follow the recommendations from consultation with interested parties.
TPR proposes to revise the limits to the following amounts:
- £5,824 for the lower limit of the qualifying earnings band
- £42,385 for the upper limit of the qualifying earnings band
These limits are used by employers to calculate how much pension contributions are due where band earnings are the basis of calculation.
The amount someone must earn to be automatically enrolled into a workplace pension (the earnings trigger) will remain at £10,000 per annum instead of being aligned with the personal allowance as it has been for previous years following concerns that low paid workers will miss out on pension contributions.
If you would like help with auto enrolment please do get in touch.
Internet links: Gov Press release