The Pensions Regulator has issued a warning to small companies that fail to adhere to the 28-day warning notices to enrol their staff in pension schemes.
The regulator warns that firms could be hit with a fine that will escalate on a daily basis until they comply. 95% of small firms who are required to auto-enrol their employees have now done so, but fines for non-compliance are on the rise.
The Escalating Penalty Notice (EPN) is one of the statutory powers the Pensions Regulator has to help maximise compliance with automatic enrolment duties. It specifies the date by which the employer must comply with certain actions or be subject to a fine. The fine levied for non-compliance is £50 per day for firms with between one and four employees, and £500 a day for those with between five and 49 employees. 96 EPNs have been issued by the Pensions Regulator in the current quarter, bringing the total issued to 127. Swindon Town Football Club hit the headlines as one of the employers fined for non-compliance.
Below is a breakdown of daily fines based on the size of your business:
|Number of employees||Prescribed daily rate (£)|
|500 or more||10,000|
The purpose of automatic enrolment is to ensure that all employees are building up a pension scheme to supplement their state pension as increased life expectancy and tougher austerity measures mean that the state pension alone will not be enough to fund retirement for current generations of employees. For more information or advice on how to ensure your business complies and on achieving the best outcome for your business and your employees, please get in touch with Antony Keen by emailing email@example.com or calling 01254 679131.
PM+M Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.