The Pensions Regulator's Charles Counsell gives an update on the progress of auto-enrolment as it moves on to small and micro employers, and on how the regulator plans to work with employers.
More than three times as many small and micro employers have now complied compared to all the large and medium employers put together.
Small employers often behave more like individuals – while many will get on with what they need to do, others may leave things to the last minute
This milestone shows the successful roll-out of auto-enrolment so far. It has brought real change to the savings landscape; however, we know there are challenges ahead as over a million more employers are due to meet their duties.
We have always expected that as the number of employers grows and the type of employer changes, we would see an increase in the use of our powers.
Small employers often behave more like individuals – while many will get on with what they need to do, others may leave things to the last minute.
The vast majority of employers comply with their duties on time, but a small number need the extra nudge of a compliance notice. In most cases this is enough to get them back on track and avoid financial penalty.
Most compliance notices are issued because an employer has failed to plan early enough. Employers should start planning 12 months before their staging date, which is when their legal duties start.
Employers who are concerned they will not be able to comply on time should contact the regulator.
Dealing with non-compliance
The regulator continues to take an 'educate and enable' approach. We alert employers through our TV, radio and online advertising and we write directly to them telling them what they need to do and by when.
Our online guides and tools make automatic enrolment as straightforward as possible. We also work with employer and professional bodies so that they are equipped to help their clients and members with their duties.
The regulator also provides information to warn employers about potential pitfalls to help them avoid non-compliance. We publish regular bulletins that show where we have used our powers and highlight lessons learned.
Our recent bulletin gave the example of an employer who had become non-compliant because they had wrongly assumed their business adviser was completing their duties for them.
Responsibility for meeting auto-enrolment lies with the employer, although if you do use a business adviser, you should be clear who will be responsible for what task.
Our priorities and approach – an update from the Pensions Regulator
Our recently published corporate plan outlines how we will retain a flexible approach, allowing us to adapt to a changing pensions landscape and help ensure savers receive the retirement income they expect.
Another employer became unstuck because they had wrongly assumed that as their staff did not need to be put into a pension scheme, they did not have duties.
However, if you are an employer, you will always have some auto-enrolment duties. You will need to write to staff to tell them how auto-enrolment affects them and you will need to complete a declaration of compliance.
The declaration tells the regulator what the employer has done to meet their duties. It is a legal duty and must be completed accurately and submitted within five months of the staging date.
Over the next two years we want see the continued successful roll-out of automatic enrolment. We want the small and micro employers who are approaching the date they need to be ready to be clear about what they need to do and act in good time.
Charles Counsell is executive director of auto-enrolment at The Pensions Regulator
