Businesses Fined £350,000 for Pension Failures

Although warnings were given by The Pensions Regulator (TPR) prior to it coming into effect, one London-based business have still found themselves with a hefty £350,000 fine, after failing to comply with auto enrolment pension rules.

They were said to have let a penalty notice keep growing, before eventually getting around to correctly re-enrolling their 5,000 staff into the company pension scheme to pay the correct contributions.

Upon re-enrolling upwards of 40 staff members and paying more than £100,000 in backdated pension contributions, the company also had to ensure that all future contributions are calculated and paid correctly. These payments were in addition to the £350,000 fine and cover the failure to re-enrol, and the error in contributions for more than 2,000 staff members.

Darren Ryder, TPR director of automatic enrolment, stated that: ‘This case is a stark warning that failing to address problems early can lead to hefty fines which could be avoided. We do not want to fine businesses, we want them to meet their legal duties and we are here to help them do this.’

The anonymous case study is included in TPR’s quarterly compliance and enforcement bulletin, which reports on TPR’s use of powers between April and June 2019. Within the report it is shown that this is the first instance of the watchdog appointing a trustee due to the existing trustee board being incompetent.

Although the scheme has been running under the employer nominated trustees, they did not ‘familiarise themselves with the requirements of UK pensions legislation’. As a result, it is clear that they either don’t have, or aren’t using their knowledge for the correct administration for the scheme. This caused many governance errors and there was little attempt to fix them.

Navigating through all the pension auto-enrolment requirements for small companies can be intimidating, however even for a Company with one employee the compliance responsibilities remain. Shelley Capital Management can assist with the setting up and operating of the Pension Plan for your company at an affordable rate giving you total piece of mind. Contact Us for further information.