EMPLOYER DUTIES AND PENALTIES

There are a number of legal duties that any employer has to deal with, which we have detailed below:

• A new employer has a Duties Start Date and is required to set up a scheme for staff on that date. Decisions will have to be made on the schemes structure.
• A Declaration of Compliance must be completed within 5 months of the Duties Start Date.
• Issue compliant letters to any new staff, whether a new or existing scheme.
• Must assess the workforce in any pay period, calculate contributions and pay these on time.
• Ensure contribution increases are enforced.
• Undertake triennial re-enrolments and re-declarations of compliance.

If you fail to comply with these then the Pensions Regulator will consider fining you. These fines can take the following formats:

Fixed Penalty Notice

If you don’t comply with statutory notices, or if there’s evidence of breaches of the law, you may be sent a fixed penalty notice. The fine is fixed at £400 and must be paid within the period set out in the penalty notice.

Escalating Penalty Notice

If you still don’t comply with a statutory notice you may be sent an escalating penalty notice. This gives you a new deadline to comply, after which you will be fined at a daily rate of £50 to £10,000, dependent on staff employed. The fine will continue to grow at the daily rate until you comply with the statutory notice, or until we stop it.

Prohibited Recruitment Conduct Penalty Notice

If you don’t comply with a prohibited recruitment conduct compliance notice or there is evidence of a breach, you may be sent a penalty notice. This fine has a prescribed rate of £1,000 to £5,000, dependent on staff employed.