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AUTOMATIC ENROLMENT: WHAT HAPPENS IF I DON’T COMPLY?

Home / News & Opportunities / Member News

Date: 16/01/2017

Like all employers, you need to comply with your duties under automatic enrolment - it's the law.

The Pension Regulator (TPR) recognises that most employers will want to do the right thing for their staff and will work with you if you need help to get you compliant. However, if you ignore your duties you may face enforcement action.
Key points
·         You, the employer, are responsible for meeting your legal duties for automatic enrolment.
·         If you don’t comply, you may face enforcement action including compliance notices, and penalty notices (fines).
·         If you receive a penalty notice, you can pay your fine online.
·         If you comply late, you will need to pay back any missed contributions to put staff in the position they would have been in if you had complied on time.
·         You should inform staff that they have the option to backdate their own contributions to your staging date.
·         If you don’t pay your fine, the debt can be recovered through the courts.
If you are late complying with your duties
TPR’s approach is to educate and enable and enforce where necessary. They send communications to you to make you aware of your duties and to help you understand what you need to do to comply with the law. It’s important that you realise that responsibility for being compliant rests with you, the employer.
If you haven’t understood your duties or have been unable to meet them, the regulator will provide support to enable you to comply. However, if you have chosen to ignore your duties, they may use their enforcement powers.
If you are late complying or think you might be, you should tell TPR about it straight away.
You should aim to put all staff back in the position they would have been in if you had complied on time.
For example, if you didn’t put a member of staff into a pension scheme on your staging date when you should’ve done, you will need to:
·         put them into a pension scheme and treat your staging date as their automatic enrolment date,
·         backdate contributions so that your member of staff does not lose out,
·         give your staff member the option to pay their own backdated contributions - they can choose whether or not they want to do this.


What are The Pensions Regulator’s enforcement options?
Informal action Guidance and instruction can be issued by telephone, email, letter and in person. Warning letters may also be sent confirming a set time frame for compliance with the duties.
 
If you receive a warning letter, call the phone number on your letter or email CandE@autoenrol.tpr.gov.uk to find out what you need to do to meet your legal duties.
 
If you don’t meet your duties within the deadline you may be sent a statutory notice.
 
Statutory notice
 
A statutory notice will tell you to comply with your duties and/or pay any contributions you have missed or are late in paying.
 
It is important that you take action to meet your duties within the time frame, or you may be issued a penalty notice.
 
Penalty notices
 
A fixed penalty notice may be issued if you don’t comply with statutory notices. This is fixed at £400 and payable within a specific period.
 
An escalating penalty notice can be issued for failure to comply with a statutory notice. This penalty has a prescribed rate of £50 to £10,000 per day depending on the number of staff you have.
 
A civil penalty can be issued for cases where you fail to pay contributions that are due. This is a financial penalty of up to £5,000 for individuals and up to £50,000 for organisations.
 
NB: The Pensions Regulator aims to fully recover all the penalties issued (using court action if necessary).
 

What to do if you have received a penalty notice
If you have received a penalty notice, you can pay it using TPR’s secure online payment service. You should have your penalty notice reference handy (shown on the front of the notice). Failure to pay the penalty can result in The Pensions Regulator bringing formal legal proceedings to recover the penalty.
Useful links
Online payment service: www.tpr.gov.uk/en/employers/what-happens-if-i-dont-comply
Popular questions: http://help.thepensionsregulator.gov.uk/faq/what_happens_if_i_dont_comply