More than 90% of the first small employers required to put their staff into a workplace pension have now complied with the law, showing that automatic enrolment is successful for all sizes of employer.

The Pensions Regulator’s compliance and enforcement bulletin, which is published today, shows that compliance remains the norm.

Around 12,000 small and micro employers became subject to the new legal duties last summer. The majority have put eligible staff into a pension without the regulator having to use its powers although, as expected, a number needed the additional nudge of enforcement action.

Minister for Pensions, Ros Altmann said:

The latest figures highlight the on-going success of auto-enrolment. It is really encouraging to see that so far, the vast majority of small and micro employers have set up a workplace pension for their staff and are helping them on their way to a more financially secure retirement. From now on, the smallest employers will start to meet their obligations and we must ensure they know what to do and have help if they need it.

So far 5.8 million people have been automatically enrolled into a workplace pension. Thanks to automatic enrolment workplace pensions are becoming the norm and we expect 9 million people to be newly saving or saving more.

The bulletin shows that between October and December, there was a sharp rise in the number of statutory notices issued by the regulator. This reflects the rise in the numbers of employers with automatic enrolment duties and the changing employer type.

Research shows that smaller employers are more likely to leave things until the last minute and this means they are more likely to receive a compliance notice which could lead to a fine.

The bulletin shows that since the start of automatic 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

Executive director of automatic enrolment Charles Counsell said:

It is very encouraging that more than 90% of the smallest employers have complied with the law, clearly highlighting that automatic enrolment is successful for all sizes of employer.

Today’s figures show that the majority of employers are doing the right thing on time and putting their staff into a pension.

We have always expected to see a rise in the number of times we use our powers as large numbers of small and micro employers reach the date their duties come into effect. Compliance notices act as a warning and give employers a deadline to meet their duties and avoid a fine.

Automatic enrolment is the law for all employers and we will use our powers where necessary to get them back on track.

Petaurum Solutions Comment

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