Auto Enrolment breaches – don’t let it happen to you!

It’s interesting that at the end of July 2013, the pensions regulator announced they were looking into 89 cases of possible breaches of pensions Auto Enrolment compliance. This is in the context of only the biggest companies going through the process, or “staging” as it’s called.

Having been close to Auto Enrolment since it was planned, I’m not surprised even the largest employers in the country are finding it difficult, and they have large HR and pensions departments and the biggest consultancy firms to help them!

Even though most employers have now heard of Auto Enrolment, few realise the sheer complexity of it. How many know (their advisers included), for example:

  • that agency workers and “contract of service” workers may be the pension responsibility of the client employer, or
  • that you have a choice between difficult and simple methods of contribution calculation with the difficult one being the regulatory default position, or
  • how you can have different Auto Enrolment start dates for different workers to best fit your quarterly business cycle, or
  • if you are a less than a 50 worker employer within a larger PAYE scheme you can move your staging date to much later.

There are loads of other issues to think about to ensure Auto Enrolment works the best it can for your company rather than the other way round.

You need a good length of time to plan appropriately or you wont get the best operational and employee outcome even if you achieve compliance. By the way, a prohibited recruitment conduct rule has been in force since July 2012 and applies to every company in the land no matter what their staging date. That’s where you could be in breach if the potential pension scheme membership features in the recruitment process and it can be shown the candidates interest in joining contributed to the decision not to take a person on. Similar to age discrimination, AE now brings risks in the recruitment process.

Unlike with stakeholder pensions, remember that the authorities have a well thought out and specified compliance and enforcement policy with some very serious sanctions available to them. Let’s not have a business we know amongst those who suffer the civil or criminal sanctions possible under Auto Enrolment.

Contact CORPIAS today for a no-obligation chat about your Auto Enrolment responsibilities and how we can help you.