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Employee Benefits News

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02 Jul 2012

Employers To Face Fines For Failure

Just three months before the launch of the automatic enrolment scheme that will see millions of UK workers join workforce pension schemes, The Pensions Regulator (TPR) has announced that employers who fail to comply with the rules will be facing a fine of up to £10,000 a day.

When TPR suspects that employers are breaching their automatic enrolment duties, it will send a written warning. If this first step is neglected and does not lead to action, employers will then be issued a fixed penalty notice of £400. The biggest penalties will be implemented when employers are found to be repeatedly and deliberately breaching their duties and will depend on the size of the company.

Companies that employ 500 or more people will face fines of £10,000 a day, while those with 250-499 staff may risk a penalty of half this sum, TPR's Employer Pensions Notice (EPN) regime states. Smaller businesses that employ 50 to 249 workers will be hit with up to £2,500 daily fines and the penalties drop further for even smaller firms, reaching £500 a day for 5-49 headcount and £50 for businesses employing one to four people.

TPR explains that the fines can be issued as many times as it takes before the employer becomes willing to comply and starts performing their duties. Further penalties will be imposed on employers who repeatedly encourage workers to opt out of an auto-enrolment pension, with fines ranging from £1,000 to £5,000 a day, depending on the number of staff.

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