Plan Sponsors Urged to Take Auto Enrolment Non Compliance Penalties Seriously
31 July 2012 (PLANSPONSOREurope.com) – Plan sponsors need to take compliance with auto-enrolment seriously or risk hefty fines or even criminal prosecution, David James, pensions solicitor at law firm Sackers, has told PLANSPONSOR Europe.
Various surveys have shown that while most UK plan sponsors are prepared for the new rules that come into force this autumn, some plan sponsors are lagging behind.
James told PLANSPONSOR Europe that these plan sponsors need to take the threat of non-compliance seriously.
“The Pensions Regulator aims to hold non-compliance to an absolute minimum. The objectives of the Pensions Regulator include establishing a pro-compliance culture and maximising the deterrence for those who are considering not complying. In reality whistle-blowing will play an important part in the Pension Regulator's detection strategy, workers who have not been provided with a pension by their employer being a likely source. The Pensions Regulator says that it will work with employers who are doing their best to comply and failing. However, the Pensions Regulator will take a different approach with employers who choose to ignore their responsibilities under the new legislation. The Pensions Regulator has limited resources and will therefore need to pick its battles carefully. However, if the Pensions Regulator decides to make an example of an employer who is wilfully not complying, it has a range of weapons in its arsenal. The Pensions Regulator's enforcement options range from a warning letter all the way up to a daily fine of up to £10,000 a day for the biggest employers and criminal prosecutions.”