08 Fall
Auto Enrolment Lessons to be Learned Recently The Pensions Regulator (TPR) has issued their latest research and analysis report into auto enrolment. This has given us some clues to what the next two to three years will bring for employers yet to start their auto enrolment duties. The report mainly covers large and medium size employers. However there are lessons to be learned for the estimated 1.3 million smaller employers due to stage between now and 2018. The use of postponement Of those ten thousand or so employers who completed a declaration of compliance, almost five thousand used postponement - and for good reason. By using postponement, employers can save significant chunks of administration and payroll time and money while complying with their duties. Therefore employers should become familiar with exactly what postponement is and how to use it. Opt-out rates Some employers might think that most or all of their workers will opt-out and so auto enrolment
won't cost them much. But all the indications are that opt-out rates are much lower than expected. According to DWP research, opt-out rates ranged between 5% and 15%. As a result, it's changed its assumption for the opt-out rate amongst all employers, - including small and micro employers from 30% to 15%. The main reasons identified by TPR for opt-outs are age (i.e. older people) and people who opted out of contractual enrolment and then opted out of auto enrolment as well. Of course employers might not have any eligible jobholders at all but more people could opt-in than predicted, so employers should be careful in their assumptions. Oct 14 Compliance and enforcement TPR says that 99% of employers have achieved compliance without intervention. However, there have been several cases they have investigated and used their powers. From 1 April 2013 to 31 March 2014, TPR issued 14 compliance notices, one unpaid contributions notice, two statutory inspection notices and one Statutory Demand. An example given by TPR in its use of an inspection notice is for a case where a breach was identified and TPR entered an employer's premises to investigate the payroll software and speak to the staff responsible for the employer's auto enrolment project. A Statutory Demand notice can be issued by TPR were it wants to see any documentation relating to the pension scheme. All of these powers are backed up by the force of the law, and employers who fail to comply can subsequently face criminal charges.