New businesses which start up from October will have instant auto enrolment pension duties once they take on a member of staff. This means that they will need to put pension plans in place alongside all the usual tasks associated with setting up a business.
New businesses who become an employer for the first time on or after 1 October won’t have a staging date but will instead have auto enrolment duties from their ‘duties start date’. The duties start date is the first day the first member of staff starts working for the business. This means that as soon as they employ someone the business will have to comply with their duties straight away.
Auto enrolment awareness and understanding
The latest employer awareness and understanding report published by the Pensions Regulator indicates, that of those surveyed, 79% of employers staging between May and November and 65% of those due to stage in January 2018 were aware of automatic enrolment.
However, just 65% of small businesses interviewed and 56% of micro employers said they understood their responsibilities fully. 47% of those staging between May and November and 43% of those due to stage in January 2018 had completed working out how many of their staff they needed to enrol in a pension scheme.
Auto enrolment compliance and enforcement
In its latest compliance and enforcement report the Pensions Regulator warns employers that ignoring the Pensions Regulator’s penalties could seriously damage the employer’s reputation. The use of fixed penalty notices (FPNs) and escalating penalty notices (EPNs) has increased during the latest quarter, rising to 14,502 FPNs and 2,517 EPNs. The Pensions Regulator is also now taking the additional step of publishing on its website the details of those who have paid their EPNs but remain non-compliant. It 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 will include the employer’s name, the penalty amount, and the first part of their postcode to avoid possible confusion with other employers with similar names.
In a recent case a company ended up having to pay £40,000 plus court costs, having cited work pressures as an excuse not to meet their duties. Another employer who had failed to fill in their declaration of compliance, blaming a number of circumstances for their lack of action, including software problems and being out of the country. accrued a fine of over £3,000.