And, cautions Milton Keynes office managing partner Stephen Eames, as the rolling programme reaches the smallest businesses, many more £400 fixed penalty notices are likely to be issued by the Pensions Regulator.
“We are hitting crunch time,” said Mr Eames pictured.
“The vast majority of employers have met their responsibilities but the smaller owner managed businesses often struggle with strategic and regulatory issues. Many work incredibly hard immersed in day-to-day operational issues with little time for anything else.
“This is where we can help them and ease the pressures they are under.”
All businesses, regardless of size, have been on a five year timeline, with “staging dates” to have suitable arrangements in place so as to allow eligible workers to be automatically enrolled in a qualifying pension scheme.
It has now reached employers with fewer than 50 employees who will be staged between June 1 this year and April 1 2017. All businesses in the UK must be compliant by 2018 at the very latest.
Non-compliance can result in tough penalties.
The Regulator can impose a fixed penalty of £400 on employers who fail to comply with their auto enrolment duties. Furthermore, persistent and wilful non-compliance will be deemed to be a criminal offence and the Regulator can ultimately use the Proceeds of Crime Act 2002 to confiscate assets.
Data from the Pensions Regulator shows that in the first quarter of 2015 the number of fixed penalties were up from 166 to 198. However compliance notices ordering action to remedy a contravention were significantly down, just 213 compared with 1,139 in October to December last year.
Mr Eames said: “Considering the number of fixed penalties issued in the third quarter of 2014 was just three, it is easy to see where the trend is headed.
“SMEs have had numerous warnings that this was coming down the road, with the Pensions Regulator writing to employers around 12 months before their staging date. But some have still chosen to ignore it, presumably hoping it would go away. It won’t.
“This is not optional; you must comply.”
Auto-enrolment is part of the government’s wider reorganisation of the pensions system given that many people have so far made inadequate provision for their retirement.
