Pension Auto-Enrolment Fines Image

Large Increase In Pension Auto-Enrolment Fines

Further to our recent article, data released by the Pension Regulator highlights that there has been a significant increase in the number of pension auto-enrolment fines for errors being handed out.

Pension Auto-Enrolment Fines

Following a freedom of information request by EMW, the data released by the Pension Regulator showed that the number of pension auto-enrolment fines relating to errors that were handed out over the year to September 2018 had increased by an incredible 144%. 35,810 businesses were fined a total of £42 million, compared to the 14,650 businesses who were fined £12.6 million the year before.  

EMW attribute the increase in pension auto-enrolment fines mainly to the expansion of auto-enrolment to smaller firms with less than 50 employees, as many lack a dedicated HR department, and therefore lack the requisite expertise to handle auto-enrolment effectively. The principal at EMW, Jon Taylor, stated: “The sharp rise in the number of fines by TPR suggests that SMEs are having real problems keeping on top of complex auto-enrolment schemes. While larger businesses will have the necessary infrastructure and expertise to correctly auto enrol workers, the same does not always apply to smaller businesses.”

Gross Unfairness

SME’s represent the backbone to the British economy. Year on year, the Government piles on extra layers of administration on businesses, some of it essential as in pension auto-enrolment, but a lot of it less so, and some of it is completely unnecessary. However, whether required or not, the fact of the matter is that it disproportionately burdens SME’s. The rules have only applied to employers with less than 50 employees since 2017. It is obviously going to take time for such businesses to get to grips with the rules, and those businesses who lack a dedicated HR department are going to struggle the most. It is therefore completely ludicrous for the Pension Regulator to therefore be dishing out pension auto-enrolment fines this early. Surely the emphasis should be on education, and highlighting how businesses can put matters right. Pension auto-enrolment fines should only come later, and should be targeted at those who fail to learn from previous mistakes. Given the difficulties with the economy and with Brexit, handing out pension auto-enrolment fines of this scale this early is depriving small businesses of money that they can ill afford to lose.

Posted in Aoto-Enrolment, General Employment Law, Pensions and tagged , , .