Auto-enrolment: escalating penalty notices quadruple


The number of escalating penalty notices issued by The Pensions Regulator (TPR) quadrupled in the first quarter of 2016, with fines ranging from £50 to £500 a day.

Employers who fail to heed 28-day warning notices risk a fine that increases each day. TPR says more than 95 per cent of the first small employers required to put their staff into a workplace pension have now complied with the law.

TPR says 96 escalating penalty notices were issued in Q1 of 2016, bringing the total issued to 127. The regulator says 806 fixed penalty notices were issued in first three months of 2016.

Minister for pensions Baroness Ros Altmann says: “The aim of automatic enrolment is to get all employers setting up pension schemes for their staff. It is most encouraging to see that even the smaller employers are managing to do this, and the proportion facing enforcement action has stayed remarkably low.”

TPR executive director for automatic enrolment Charles Counsell says: “Most employers comply on time and we continue to see compliance rates in the high nineties. Others need a nudge and are prompted to meet their duties when one of our notices comes through their letterbox.

“It’s simply not fair for staff not to receive the pension contributions they are legally due. But failing to act also means an employer risks clocking up a significant penalty until they put things right.

“Our message remains that if things aren’t going well, then talk to us; don’t ignore us.”

Selected powers used in the period

Power Description Number in period Number to March 2016
Information notice The power to demand information and documents under section 72 of The Pensions Act 2004 12 69
Inspection The power to inspect premises under section 74 of the Pensions Act 2004 3 24
Warrant The power to search premises and take possession of content under section 78 of the Pensions Act 0 0
Compliance Notice A Compliance Notice under section 35 of the Pensions Act 2008 to remedy a contravention of one or more automatic enrolment employe duty provisions 3,057 7,834
Unpaid contributions Notice An Unpaid Contributions Notice under section 37 of the Pensions Act 2008 to remedy a late or non-payment due to a qualifying pension scheme 187 409
Fixed penalty Notice A Fixed Penalty Notice under section 40 of the Pensions Act 2008 of £400 for failure to comply with a statutory notice or some specific employer duties 806 2,234
Escalating penalty Notice An escalating penalty under section 41 of the Pensions Act 2008 of between £50 and £10,000 per day (depending on size) for failure to comply with a statutory notice 96 127
Total 4,161 10,697

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Source: The Pensions Regulator

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