Businesses risk non-compliance and fines after research found that just over half of employers are confident their pension scheme complies with automatic enrolment regulations.
Analysis from Towergate Employee Benefits, published last week, found that 57% of employers were “very confident” that their pension scheme was compliant with auto-enrolment requirements, such as minimum contribution levels and re-enrolment every three years.
Sorangi Shah, client director of Towergate Employee Benefits, warned that some businesses were left open to the possibility of non-compliance notices and fines from the Pensions Regulator (TPR).
She said: “Auto-enrolment is designed to make it easy for employees to benefit from a pension, but employers need to fully understand the regulations and know who is eligible and how much to contribute, otherwise they may be at risk of non-compliance.
“With little over half of employers feeling very confident that they are fully compliant with the auto-enrolment regulations, it is important to take advice from a pension professional and consider having a pension health check.”
TPR used selected automatic enrolment powers a total of 157,142 times in 2024. This included issuing 42,181 fixed penalty notices during that period.
Towergate Employee Benefits said employers needed to understand the contribution rates and cost impact, as well as ensuring they had payroll systems and communications in place.
The company said it was not unusual to find that pension certificates were not being completed by employers. These are required for those who do not base pension contributions on qualifying earnings and choose an alternative basis.
Organisations such as the Institute for Fiscal Studies have been calling for the government to raise the minimum auto-enrolment contribution level to improve pension adequacy.
