The Pensions Regulator (TPR) has now begun carrying out spot checks on employers across the UK to make sure that they are complying with their workplace pensions duties and are providing staff with the workplace pensions that they are entitled to by law.

According to TPR these inspections help them to understand any challenges employers are facing, and whether it needs to make any changes to its guidance. This also enables them to identify employers who fail to meet their duties, and take enforcement action where necessary.

Auto enrolment has been a great success so far, with more than seven million people now saving into a workplace pension. It is important employers continue to make contributions into their employee’s pensions and these spot checks make sure ongoing compliance is being maintained.

As well as investigating any non-compliance, these inspections will also help shine a light on employer behaviour and allow TPR to see different types of employers’ schemes in practice and also identify best practice that others can learn from.

The Pensions Regulator have confirmed that they will continue with their checks over the coming months, generally sending a statutory notice to the employers they have selected ahead of their visits.

Get the process right

TPR is concerned that some employers are not following the correct procedures and during the course of their inspections have seen a number of instances of employers agreeing to opt staff out of a workplace pension before they have been enrolled. This is not in accordance with the auto enrolment rules. According to TPR:

‘Some employers claimed they were unaware as to the formality of their duties or the process they needed to follow, and had simply been trying to do their staff a favour by offering them the option of opting out up-front. But whether their motivation was genuine, or whether they were simply trying to get out of paying their staff the pension contributions they were due, the result was the same – they were in breach of their legal duties. Eligible staff need to be enrolled first, and can then opt out. One of the cornerstones of automatic enrolment is capitalising on inertia, and it has proved very successful so far, in helping people who might never have saved for retirement before.’

Auto enrolment for new employers

Under auto enrolment legislation employers have to enrol qualifying employees into a workplace pension. Duties include paying contributions on behalf of the employee. The process of auto enrolment has been phased in from October 2012, when the largest employers had to comply with the rules. However, the rules are set to change and new employers will have to comply with their automatic enrolment legal duties, as soon as they employ their first member of staff.

For more information on auto enrolment and your obligations, please contact your usual Campbell Dallas advisor.