The Pensions Regulator (TPR)
TPR will be responsible for ensuring that employers comply with the employer duties. They will focus on educating employers but will also have the power to enforce penalties for non-compliance.
How will TPR help to ensure that employers comply with the†duties?
TPR's approach will include:
- telling employers when their staging date is
- providing employers with guidance and information about their employer duties
- fining employers who fail to comply with the new employer duties depending on the severity of the breach.
TPR will have the power to issue compliance notices and impose penalties on employers who fail to comply with their employer duties. For example:
- Failure to automatically enrol eligible jobholders
- Failing to refund contributions to those who have opted out
There is a three stage process,†summarised below, although TPR may informally intervene before they take formal action.
Stage 1 : Compliance/unpaid contributions notice
- Employers are given a specific timescale to put things right.
- They may also need to make backdated contributions with interest added.
Stage 2 : Fixed penalty - £400
- Employers need to correct the breach identified in the previous compliance notice.
- They'll be given at least four weeks from the date of the fixed penalty notice to put things right.
Stage 3 : Escalating penalty notice
- Employers will face daily escalating penalties in addition to any fixed penalty if they fail to comply with the previous notice.†
|Number of people1||Daily rate|
|500 or more||£10,000|
1 The daily rate†is generally determined by the number of†people in the employer's PAYE scheme or the number of†people affected by unpaid contributions.†
1: Wilful failure to comply
Employers who wilfully fail to comply with the employer duties face fines and/or up to two years' imprisonment.
Employers who induce workers not to join or to opt out of a pension scheme may have fixed and/or escalating penalties imposed.
3: Prohibited recruitment conduct
Employers are not allowed to make any statement or ask any question during the recruitment process, which indicates (either explicitly or implicitly) that the worker may not join or may opt out of a pension scheme. Separate penalties apply to employers using prohibited recruitment conduct. These are shown in the table below.
|Number of people2||Fixed penalty|
|250 or more||£5,000|
2 This is generally the number of people affected by any breach identified.
Appealing against a penalty
Employers have the right to appeal against any penalties imposed by TPR. they can do this by writing to TPR.
If TPR decides to review a penalty, it will be suspended from the date they begin a review until the date the review is completed.
TPR can then confirm, vary or revoke the penalty or substitute it for a different penalty.
Published April 2013
For professional advisers only