Pensions Auto Enrolment: Round up from the Pensions Regulator

The Pensions Regulator has provided an update of recent developments and as expected, it’s been a busy start to 2015. The Pensions Regulator has begun sealing the envelopes and posting the first of its ‘all employer’ mail out letters. They’ve refreshed their website, introducing information targeted directly at the many hundreds of thousands of small and micro employers due to automatically enrol staff in the next two years.

While they have a new audience every month – as automatic enrolment rolls out to new employers – their core messages remain the same

  • Know your staging date
  • Find out what you need to do and by when
  • Make sure you leave sufficient time to prepare, and
  • Test your systems in advance of your staging date being recurring themes.

AE: The wind of change

The introduction of automatic enrolment has also been a catalyst for bringing business advisers such as bookkeepers, accountants, IFAs and HR and payroll professionals into the planning process for discussions about how major organisational changes will be implemented. Those employers that have done so, well ahead of their staging date, have avoided some of the challenges and complexities faced by others due to data compatibility problems.

The focus of attention is moving away from the in-house payroll teams of the large employers who have automatically enrolled over the past two years. Bookkeepers, accountants and payroll bureaux are now on the front line of assisting their clients to effectively enrol their eligible workers. These days, it’s not the boss, but the client who is tapping on your shoulder asking for a solution for automatic enrolment.

TPR’s compliance work

The end of last year coincided with the deadlines for the thousands of medium employers who staged in the early summer of 2014 to complete their declarations of compliance.

As predicted, the number of times the Regulator used powers such as fines, and inspections rose significantly. For example, at the end of September 2014, they had issued a total of 177 compliance notices since July 2012 but over 1,000 more were sent out in the final quarter of the year. There are two underlying reasons explaining the increase in use of powers during this quarter.  First, the fact that more employers have staged, and second, as anticipated, the behaviour of smaller employers is different. There are more who, despite the message to prepare early, leave it too late.

Enforcement action starts with statutory notices and is followed by penalty notices. Further non-compliance may result in court action. In the majority of cases, employers who have received a statutory notice from the Regulator are prompted to follow the instructions given to them and take action to meet their duties to their workers.

Proactive compliance work

It’s worth sharing one piece of information contained in the Regulator’s latest compliance and enforcement bulletin, which details their use of powers and shares lessons learnt to help other employers and their advisers.

Employers must tell the Regulator how they have complied with their duties by providing certain information through the online declaration of compliance. One of the main reasons employers were issued a compliance notice was because they had failed to complete a declaration within five months of their staging date.

Using the systems and data available to them, the Regulator has been proactively checking the accuracy of information submitted by employers when they declare compliance. As a result of this, they have been selecting employers for further engagement, which has included visiting premises to check records and interviewing key staff.

More than 1.3 million employers need to comply with their new workplace pensions over the next three years and declare compliance with the Regulator. That is why ensuring the accuracy of declarations made by employers will continue to be a focus for them.

The impact of a letter from the Regulator

One final reminder – be ready for questions from clients who receive a letter from The Pensions Regulator. The roll out of automatic enrolment has so far been a success and the letter they are sending to all small and micros over the coming months, which started from the end of January, will make clear when their duties begin, enabling them to plan ahead.

The message for business advisers is clear: be prepared for clients to approach you about automatic enrolment and let your clients know to look out for a letter from The Pensions Regulator in the coming months.

Petaurum Solutions’ Comment

As we’ve said previously, the core messages from The Regulator are crucially important:

  • Know your staging date
  • Find out what you need to do and by when
  • Make sure you leave sufficient time to prepare, and
  • Test your systems in advance of your staging date being recurring themes.

Complying with Auto Enrolment obligations can be a daunting prospect for many small and micro-sized business.  Choosing a cost effective, long-term implementation solution is critical for these businesses to ensure they do not become swamped with the processing requirements and responsibilities that Auto Enrolment can bring.  Therefore, for businesses considering their solution, focus should not only be on the pension scheme, but also on how it will be administered, methods to communicate, impacts on systems and data collection processes along with any HR and Legal changes may you need to make.

At Petaurum, we have developed a complete SME specific, competitively priced end-to-end solution that will take care of the above, leaving you free to manage your business safe in the knowledge that your Auto Enrolment obligations are in professional hands.  Want to know more?  then why not join us on one of our free to access online 40 minute AE insight sessions by contacting us to secure your PAE future.

This information is intended as a general overview and discussion of the subjects dealt with. The information provided here was accurate as of the day it was posted; however, the law may have changed since that date. This information is not intended to be, and should not be used as, a substitute for taking legal, HR or benefits advice in any specific situation. Petaurum Solutions is not responsible for any actions taken or not taken on the basis of this information. Please refer to the full terms and conditions on our website.

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