The dog ate my auto-enrolment application

The Pensions Regulator has estimated that there are over one million employers due to stage between now and 2018, and concern is that smaller employers are still in the dark regarding their need to comply.


Founded in 1881, Swindon Town Football Club has a long history. The current League One football team has been in administration twice and in 1990 was demoted by the Football League (as it was then) after several breaches of the rules following illegal payments to players.

In April 2016, Swindon Town became the poster company for how not to avoid your auto-enrolment duties, receiving fines of £22,900 from the Pensions Regulator (tPR) after it failed to put eligible workers into a pension scheme or comply with other workplace pension duties.

Just as the Football League had penalised the club 26 years earlier for 36 breaches of the rules, tPR red carded the football team, electing to move from a ‘focus of remedial action to one of sanctions and redress’, with a clear view and timeline dating back to July 2014 of infringements caused by the company.

A clear message

With Swindon Town, tPR sent a clear message that deliberate non-compliance would not be tolerated, hoping that employers would learn lessons from this action. They urged employers not to ignore their duties and reminded them that help was available, if needed.

This was not an empty threat. In October 2016, tPR’s quarterly compliance and enforcement bulletin for the period 1 July 2016 – 30 September 2016, showed that they were not afraid to caution employers and fine those who failed to heed their warnings.

Most employers are successfully navigating their auto-enrolment requirements, and those that struggle often find a compliance notice is enough to steer them back on track. A compliance notice is used to remedy a contravention of one or more auto enrolment employer duties.

In the period to June 2016, 3,392 notices were issued, bringing the overall total to 11,099 since 2012. However, tPR has continued to flex its muscles and, in the last quarter to September 2016, an additional 15,073 were issued bringing the overall total of compliance notices to 26,040.

At the same time tPR also doubled the amount of fixed penalty notices to employers, issuing 3,728 to bring the total issued since 2012 to 6,779.

Auto-enrolment has been in play since 2012 and tPR has highlighted that stating illness, being short staffed or confusion are not reasonable excuses to those employers who contested their fines clarifying that whilst ‘reasonable excuse’ is used by HMRC for appeals against tax penalties, these regimes are separate: ‘if you are too unwell to complete your AE duties, you’ll need to find someone else who can’.

Other methods

When compliance notices and fixed penalties fail to work, tPR can look to an escalating penalty notice (ESN), which can result in a fine of between £50 and £10,000 a day. However, fewer than 5% of compliance notices progress to an ESN. The Pensions Regulator finds this low percentage encouraging believing that it demonstrates that their ‘approach of educating and enabling before enforcing is both effective and proportionate’. Of the total of 741 ESNs issued since 2012, 576 were issued in the last quarter, a clear warning to employers that tPR is not backing down.

The Pensions Regulator has estimated that there are over one million employers due to stage between now and 2018, and concern is that smaller employers are still in the dark regarding their need to comply.

The Pensions Regulator is clear ‘it doesn’t matter how many staff you employ or how low your pension contributions are, the law still applies to you and you need to meet your duties so your staff don’t miss out’.

Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it. The responsibility for complying rests with the employer.

The Pensions Regulator, along with any additional provider and adviser, will work with employers who haven’t understood their duties or been able to comply to ensure they become compliant. But if an employer has chosen to ignore their duties, tPR will use their powers, where necessary, to ensure compliance.

Putting your head in the sand will not work. If you have not yet staged, you need to clarify your staging date.

Karena Woodall is a consultant at Mattioli Woods. 

This article was provided by Mattioli Woods.

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