Thu, 10 Nov 2011

Failing to comply with auto-enrolment could land you in jail

The Pensions Regulator says that non compliance with auto-enrolment could result in criminal proceedings.

The regulator is responsible for overseeing compliance with pension auto-enrolment, which is being phased in from 2012 for companies with more than 120,000 people on their PAYE scheme, and will be mandatory for all firms in 2016.

There will be a staged process of sanctions if an organisation does not comply with the new duty.

Initially a firm will receive a warning in the form of a ‘compliance notice’ giving it 28 days to comply. The next stage, should the company fail to comply, is a £400 fixed penalty fine, which can be appealed.

Ongoing non-compliance could result in escalating penalties and also civil or criminal action.

A spokesman for the Pensions Regulator said: “Civil or criminal action would be the last resort. We would expect the vast majority of cases to be resolved at an early stage and there will be support on offer so when we send out compliance notices employers will be able to call us and we can help them to comply.

“So although the legislation provides for prosecution, that would very much be a last resort.”

See also:

• Option to auto-enrol ahead of staging date introduced
• Payroll World and Sage undertaking definitive RTI and auto-enrolment survey
• Regulator calls on software developers to share auto-enrolment product details