18 Nov 2019
The Pensions Regulator is getting tougher on auto-enrolment compliance.
They may impose fines ranging from a £400 fixed penalty, to a varying daily escalating penalty from £50 to £10,000 for continuous non-compliance.
The largest single fine to date has been a staggering £350,000. Recent Escalating Penalty Notices (EPNs) amounted to over £300,000 in Q2 2019 alone. EPNs have included Cricket Clubs & a Nursery school.
A particular area of interest, for Advice firms, is in regard to default investment offerings. Under the laws, a scheme must review its default strategy and the performance of its default arrangement every three years or if there is a significant change in the demographics of its membership.
The watchdog has recently contacted trustees of hundreds of schemes and asked them to confirm that they have reviewed their default investment arrangements.
In addition ,more than 500 defined contribution schemes with between two and 999 members have been contacted as part of a pilot to confirm if both the strategy and performance of their scheme’s default arrangement have recently been reviewed and remain suitable.
Advisers clearly have an important role to play in helping employer clients ensure they are continuing to meet the full range of auto-enrolment responsibilities.