An unnamed London-based employer has been hit with a £350,000 fine from The Pensions Regulator (TPR) for failing to fully comply with its pension duties.
The regulator's quarterly compliance and enforcement bulletin for April to June, published today (22 August), revealed that the employer had failed to comply with duties to automatically re-enrol members of staff into its pension scheme and pay the right contributions.
Despite warnings from TPR, the employer allowed an escalating penalty notice -issued where an employer fails to comply with a statutory notice - to grow before complying with the rules, which includes re-enrolling employees every three years.
Following TPR's intervention, the employer has now re-enrolled more than 40 employees and paid more than £100,000 of backdated pension contributions to more than 2,000 members of staff, as well as ensuring ongoing contributions are correctly calculated and paid.
TPR director of auto-enrolment (AE) Darren Ryder said: "This size of fine is rare as the vast majority of employers now consider AE to be an everyday part of running their business and helping workers to save.
"However, this case is a stark warning that failing to address problems early can lead to hefty fines which could be avoided.
"We do not want to fine businesses, we want them to meet their legal duties and we are here to help them do this."
He also said that the case demonstrates that it is vital to carry out both ongoing duties and re-enrolment correctly, and that TPR would "take action" where necessary.
However, the company could see its fine reduced if it takes the issue to court. This was the case for recruitment agency Workchain, which was initially hit with a £280,000 fine in October 2018 after illegally opting staff out of their workplace pension. TPR announced earlier this week that this fine had been reduced by the Court of Appeal from a total of £280,000 to £180,000.
Today's quarterly bulletin revealed that more than 200,000 employers have met their re-enrolment responsibilities and tens of thousands of small employers - those with fewer than 50 members of staff - are approaching the third anniversary of their staging date.
Meanwhile TPR allowed one firm to conduct a rarely-used regulated apportionment arrangement in the quarter, which subject to conditions, separates a scheme from its employer if approved by the watchdog. The Pension Protection Fund must also confirm that it does not object to the application.
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