Swindon Town Football Club (STFC) was issued with a compliance notice on 18 August 2014 directing it to automatically enrol staff and pay contributions but failed to comply by the deadline of 17 October 2014. As a consequence, The Regulator issued a £400 Fixed Penalty Notice (FPN) which the company failed to pay. An Escalating Penalty Notice (EPN) was issued on 20 January 2015 as the compliance notice still hadn’t been complied with, informing the club that, if it did not comply within a 28-day period, it would be fined at the rate of £2,500 per day (the accrual rate based on the number of workers in STFC’s PAYE scheme). Once STFC made contact with the Regulator the escalating penalty was stopped on 26 February 2015 once STFC had completed a declaration of compliance, provided supporting evidence and assured the Regulator that backdated contributions would be paid within two weeks. However, the Regulator subsequently received a late payment report from the pension provider that confirmed no pension contributions had been made, including back payments owed.
In response to a request from the company to review the EPN, the Regulator wrote to STFC explaining that the request was received outside the statutory 28-day period, and asked the company to get in touch urgently to discuss the outstanding pension contributions. With no payments forthcoming, on 12 June 2015 an Unpaid Contributions Notice was issued requiring STFC to make the payments within 28 days. No response was received to this notice, and as a result the Regulator conducted an inspection on STFC, during which the company agreed to take specific action to fulfil its duties. Despite initial progress, liaison with the pension provider revealed that some contributions were still outstanding. As a consequence, STFC was issued with a second EPN on 17 December 2015 requiring the missing contributions to be made by 28 January 2016. However, the provider informed the Regulator on 18 January 2016 that the contributions had been paid up so no penalty accrued.
The total amount of outstanding contributions that STFC paid to their pension provider was £13,613.39. Payments for all the back contributions up to December 2015 were made in three instalments between 15 and 19 January 2016. Data on the staff who were due pension contributions for January 2016 was uploaded to the pension provider and paid on 26 February. This brought their account fully up to date. As a result of the Regulators intervention, employees of STFC who were eligible for automatic enrolment were in the same position they would have been had STFC automatically enrolled them on their staging date. The penalty fine of £22,900, which included the £400 FPN, was settled in full on 16 February 2016.
This case illustrates the need to engage early with the Regulator where they have identified non-compliance. STFC’s initial lack of action led to further delays in complying with their duties, and as a result their intervention escalated from a focus on remedial action to one of sanction and redress. In respect of STFC’s automatic enrolment duties we issued a Compliance Notice, a FPN and an EPN. In respect of the failure to pay the pension contributions due, we issued an unpaid contributions notice and an EPN, and conducted a section 74 inspection. Had STFC responded to our initial contact and taken action quickly, £22,900 of penalty fines could have been avoided.
Taken from the Pensions Regulator, Regulatory intervention report, Full details can be found here
Petaurum Solutions Comment
This case clearly demonstrates that whilst the Regulator will provide help and assistance for companies’ stage it will also take steps to ensure compliance with the legislation. The key to your Auto Enrolment success is a mixture of planning in advance, Engaging with the Subject matter Experts such as Payroll, Pension Providers and Assessment Providers to ensure everything is in place and tested before your staging. If you are looking for a great Pensions Auto Enrolment solution that is easy to implement and manage and will keep you compliant then why not speak to us as we have a solution to fit all needs and budgets.
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