Employers are at risk of being fined by Her Majesty’s Revenue and Customs (HMRC) due to lack of knowledge regarding workplace pensions. Almost two-thirds of small and micro employers do not have accurate knowledge of their staging date for automatic enrolment, according to research published in August 2015 by The Pensions Regulator, which has issued a warning to employers as a result.
Every employer is given a date set in law when their automatic enrolment duties start – their staging date – and these duties will apply to over 1.8 million small and micro employers over the next two years. However, the research shows that as well as the majority of small and micro employers not having accurate knowledge of their staging date, a significant proportion have no awareness or understanding of automatic enrolment.
Many small and micro employers have consulted or are planning to consult an external adviser, such as a financial adviser or independent adviser, regarding automatic enrolment, with the majority of them expecting to rely on them for help.
The Pension Regulator’s Executive Director for Automatic Enrolment Charles Counsell has warned there is no room for complacency from employers when it comes to automatic enrolment: “My message to employers remains clear: start getting your plans in place or you risk a financial penalty.”
The key findings of The Pension Regulator’s employer automatic enrolment survey:
- Nine in ten employers staging between August and November 2015 had commenced preparation for automatic enrolment.
- Seven in ten small employers expect to rely on an adviser for assistance with automatic enrolment.
- Almost 80% of employers staging in 2015 knew their staging date, but less than 30% of employers staging between January and November 2016 accurately know their staging date, similar to the 30% of January-April 2017 stagers who know theirs.
The key findings from The Pension Regulator’s intermediaries’ survey:
- 97-98% of intermediaries are aware of automatic enrolment, and 94% of bookkeepers.
- The Pensions Regulator is likely to be recalled as a sponsor of advertising on automatic enrolment by 70% of intermediaries, the Department for Work and Pensions (DWP) by 58% and HMRC by 44%.
- An increasing proportion of intermediaries plan to act on behalf of their clients, with 96% or more accountants, bookkeepers and payroll administrators planning to offer services to micro employers.
The Pensions Regulator advises employers to begin preparing for automatic enrolment at least one year in advance of their staging date. The Pensions Regulator’s website includes a tool which employers can use to work out their staging date, and a Facebook page has been launched to inform employer about their automatic enrolment duties.