The Pensions Regulator (TPR) has published guidance and revised codes of practice, which aim to support auto-enrolment by helping to ensure workplace pension scheme members receive the pension contributions they are due.
The documents set out:
- Guidance for employers that have primary responsibility for ensuring the correct level of contribution is paid to schemes on time. This explains how employers can meet their duty to calculate the correct pension contribution.
- Codes and supporting guidance for trustees and pension providers setting out how they should meet their obligations to monitor the payment of contributions due to be paid, provide information to members, and report material payment failures to both TPR and scheme members.
The development and publication of these documents is part of TPR’s ongoing work with industry to ensure all defined contribution (DC) pension schemes meet a suitable quality standard.
The guidance provides clear information for employers about their responsibility to pay the correct level of contributions into their pension scheme on time. This includes information about how to calculate, deduct and pay contributions.
TPR consulted on the codes of practice on reporting late payment of contributions in 2012 and received responses from pension providers, pension trustees, lawyers, trade bodies and pension consultancies.
It will take a phased approach to the implementation of an online reporting portal and standardised reporting.
The draft codes of practice have been laid before Parliament and the Northern Ireland Assembly. After the process is completed, these codes are expected to come into force in autumn 2013.
Charles Counsell, executive director for automatic enrolment at TPR (pictured), said: “With automatic-enrolment creating millions of new pension savers, it’s more important than ever that employer and pension scheme systems are administered to support good outcomes for members.
“The risk of incorrect payments will increase as tens of thousands of new employers without experience of workplace pensions enter the market. Employers, providers, the regulator and members themselves all have a role to play in the protection of member savings.
“Pension schemes should have in place a monitoring system that should be proportionate and risk-based. This process will help to ensure the correct flow of the right amount of money into members’ pension pots.
“By working together, employers, providers, members and the regulator can help make automatic-enrolment a success.”