To ask Her Majesty's Government what steps they are taking to (1) ensure that small and medium-sized enterprises that have set up an auto-enrolment pension scheme have done so correctly, and (2) safeguard workers against pension contribution errors made by their employers.
Answered on
11 September 2018
Automatic enrolment has been a great success, with over 9.8 million employees enrolled and more than 1.3 million employers having met their duties to date.
The Department and The Pensions Regulator remain committed to enabling small and micro employers to comply with automatic enrolment by making the experience as straightforward as possible for this group.
As part of this work, the Regulator launched an interactive step-by-step guide. This simplified guide to meeting automatic enrolment duties is designed to meet the specific needs of employers who may not have pensions experience, including those with just one or two staff. The guide includes an online tool so that employers can easily find out what they will need to do to comply and when. Using the online tool also means employers will receive tailored communications relevant to their circumstances. The step-by-step guide to automatic enrolment can be found on their website.
Government has put in place a robust, proportionate compliance framework. This is administered by The Pensions Regulator, and includes detailed regulatory guidance about how to comply with the law. An employer is required to select a qualifying pension scheme; enrol qualifying staff into that scheme, and deduct any contributions payable under automatic enrolment.
Employers are also required to pay those contributions across to their chosen pension provider by a set deadline. Although the deadlines for contribution payments vary, depending on the type of scheme being used, there is an overall legal deadline of the twenty-second day of the following month; which aligns with the HMRC deadline for paying tax and National Insurance.
Qualifying pension schemes for automatic enrolment are subject to the same regulatory framework as all trust-based workplace pension schemes, also overseen by The Pensions Regulator. The Regulator has published codes of practice on its website setting out how trustees of defined contribution pension schemes and managers of personal pension schemes should monitor the payment of contributions; provide information to help members check their contributions; and report material payment failures to the Regulator.