What happens if I fail to comply?
The employer duties are not optional. The Pensions Regulator (TPR) will be responsible for ensuring that you comply with the new employer duties.
Although their approach will be to educate and encourage compliance, you will face substantial fines or even imprisonment if you don't comply.
TPR have the power to issue compliance notices and impose penalties if you don’t comply with the automatic enrolment 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, detailed below, although TPR may informally intervene before they take formal action.
Stage 1: Compliance/unpaid contributions notice
Stage 2: Fixed penalty notice - £400
Stage 3: Escalating penalty notice
TPR can impose three other types of penalties if you’re found to be guilty of:
Wilful failure to comply
Prohibited recruitment conduct
Appealing against a penalty
You have a right to appeal against any penalties imposed by TPR and must do so in writing. 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. They can then confirm, vary or revoke the penalty or substitute it for a different penalty.
Published March 2013