Pension Auto-Enrolment fines rise by 144 per cent
Is your auto-enrolment process efficient? According to statistics from The Pensions Regulator, there has been an increase in fines made to businesses whose auto-enrolment applications are not compliant with regulations.
The statistics, which show that fines for automatic enrolment errors have jumped to £42m in the last financial year compared to £12.6m in 2016/17, are startling to say the least. Why are so many businesses getting it wrong?
Smaller businesses are suffering
Since auto-enrolment was rolled out to include smaller businesses, many organisations who do not have enough resources to deal with the complexity of the auto-enrolment scheme may have made errors when dealing with the requirements of it.
Where larger businesses will often have a department or individual dedicated to pensions, smaller businesses may have neither the time to efficiently deal with the scheme, nor the budget to employ extra staff or hire an external service to manage the scheme for them. This might put smaller businesses at risk of making errors when signing their employees up to their scheme.
Regulations for auto-enrolment schemes can be quite complex, which can result in issues with compliance or record-keeping that could have gone unnoticed for some time. These issues stack up, resulting in larger fines as time goes on.
It’s also important to note that businesses need to provide regular data updates on employees to The Pensions Regulator. Providing these regular updates is a requirement for employers and not doing so can also result in a fine.
Smaller businesses may find it more cost-effective to have an external service to review their in-house auto-enrolment procedures, which can help to ensure full compliance with the regulations at every step of the pensions process. They can also assess whether you’re getting value for money from your current provider, performing an audit on the services that they are offering to you. This could assist businesses in managing their scheme more efficiently, mitigating potential errors that could arise in the process.
For smaller businesses, fines can have a huge impact. That is why it’s so vital to ensure your procedures are compliant. An external service that has extensive experience in auto-enrolment can pinpoint errors you may not have noticed, and potentially save your business money in the long run. You may find that it streamlines your entire process and saves your business time, too!
This article is provided by Busy Bees Benefits.
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