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As an employer you will be fully aware of your responsibilities under the auto enrolment legislation after all the requirements commenced in 2012 and became fully operative from 2019 for businesses to provide, administrate and fund your employee’s workplace pension.

So, what could go wrong you may think having installed the latest in payroll software, engaged with sophisticated pension providers, kept your records and communicated as required with your staff. Well, let’s have a look at some numbers- 20,382, 13,604 and 15,302 – these are not as you have probably guessed lottery numbers they are quite literally the numbers of specific transgressions recorded by the Pension Regulator (TPR) made in many cases by employers believing they were compliantly delivering their auto -enrolment duties, so it is interesting to look at these in some detail so other well-meaning employers like yourselves can avoid a similar outcome.

These figures are the latest issued by the TPR (covering the period January – July 2022) and represent 20,000+ employer compliance notices, 15,000+ unpaid contribution notices and 15,000+ fixed penalty notices. Marginally speaking this data represents a small reduction in transgressions from the previous half year, but in reality, for a provision that is supposed to be automatically processed, it is worrying that so many employers are committing serious enough errors to either have to fund back contributions on behalf of their employees or face financial penalties and public shaming for failing in their employer’s duties.

From our experience auto enrolment issues arise nearly always as a result of a change in the system, for example in the administration personnel, in the process (moving from internal to external or vice versa) or changing your payroll software or bureau. The error may very often be quite subtle, but as time progresses the issue extrapolates and can become challenging to fix and expensive to resolve.

The answer in most cases is that had the scheme engaged in an annual or even biannual pension governance report where contributions are reconciled, systems are checked and compliance confirmed, then problems are identified quickly, and issues are resolved satisfactorily before they become a major breach.

Initially during auto enrolment implementation many companies could not see the value of a governance report given the system at least conceptually was all automatic and straightforward, but as always delivery of government legislation particularly as it evolved has proven more testing.

Our view is therefore that this data provided from the TPR should be taken as a sign that even well-meaning employers can be tripped up by what can only be described as demanding legislation. Therefore, if you don’t wish to establish a governance reporting procedure, then the simple step of requesting a pension audit from your pension consultants or advisors would certainly be a prudent business move.

In many instances this does not mean immediate cost to the business as many consultancies like ourselves are happy to deliver a high-level auto enrolment audit on a complimentary basis, on the proviso that any issues that may require our action are completed on an agreed cost basis – clearly if all is as it should be then the audit has been a great piece of due diligence completed at no cost to you as the employer.

The number of companies in the last rolling 12 months (June 21 -July 22) that the TPR has found in breach of auto enrolment regulations is a staggeringly over one hundred thousand, and I suspect many of these business’s believed they were compliant until audited by the TPR.

A cautionary thought indeed when you consider the impact that Covid 19 has had on business practices over the last few years, So, even if your workplace pension system is only a few years old it may well pay to arrange an audit.

Nigel Saunders is an Employee Benefits Consultant at Acumen Employee Benefits. info@acumeneb.com / www.acumeneb.com