The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
Those who employ 5-49 staff will see their penalty build up by £500 a day.
Although more than 95% of employers are meeting their automatic enrolment duties (AE) on time, TPR are taking a tough stance with those who fail to give their staff the pension they are due.
Make sure you know what your clients need to do, and when, to help them avoid a fine
The Pensions Regulator has all the information and guidance to help you understand your clients’ ongoing duties
The Pensions Regulator also produces a free, monthly e-newsletter with useful information about automatic enrolment. April’s newsletter featured stories on the recent changes to earnings thresholds, re-enrolment, and how to complete a declaration of compliance. There’s also a regular feature which focuses on ‘Hot Topics’ that their contact centre is taking calls about.
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Expansion of Basic PAYE Tools for auto enrolment recommended 19 May 2016
The Work and Pensions Committee has published a report on automatic enrolment which includes their recommendation that the DWP work with HMRC to expand Basic PAYE Tools to support small businesses in meeting their automatic enrolment obligations. This Eleventh Report of Session 2015–16 says that the decision not to develop the HMRC Basic PAYE Tools (BPT) to support AE was a mistake. The BPT are trusted by small and micro employers, many of whom will not be able or willing to use commercially available software. The Pensions Regulator (TPR) has acknowledged that small and micro employers need automated support to cope with AE. Its solution has been to build an entirely separate Basic Assessment Tool that has limited functionality and cannot send information to pension providers. This risks undermining AE. Automatic enrolment (AE) has so far been a tremendous success. It has resulted in more than six million people being newly enrolled into a workplace pension scheme. Rates of opting-out have been lower than expected. AE is on schedule to have a transformative effect on private pension saving, but it is now at a crucial and risky stage of its development. It is imperative that it is not undermined by other government-sponsored forms of saving. Gaps in pension law and regulation have allowed potentially unstable master trusts onto the market. Should one of these trusts collapse, there is a very real danger that ordinary scheme members could lose retirement savings. There is also a risk that faith in auto-enrolment as a whole will be undermined. We support the Minister’s call for a Pensions Bill to introduce stronger regulation of master trusts. We recommend the Bill makes provision for The Pensions Regulator (TPR) to have power to enforce: minimum financial and governance standards for market entry; ongoing requirements for master trust schemes, which might include making compliance with the master trust assurance framework mandatory; and measures to protect member assets in the event of a master trust winding up. DWP and TPR have taken positive steps to engage with smaller employers. Communications campaigns have successfully raised awareness of AE. The priority now must be for small and micro businesses to understand their AE duties and the consequences of non-compliance. The Committee’s other conclusions and recommendations are as follows:
We recommend that DWP and TPR adapt AE communications to focus on the financial consequences of non- compliance and emphasise that AE cannot be ignored. (Paragraph 30)
The Department have stated unambiguously that employers are not liable for their choice of AE pension scheme. Legal experts, however, have told us there could be grounds for legal action if employers cannot demonstrate due diligence.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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