The latest Pensions Regulator’s commentary and analysis has revealed that 66% of employees are now members of a pension scheme, compared with 47% in 2012. The Pension Regulator declares auto enrolment a success. It seems the historic decline of the working population to provide for their pension has been reduced.
Compliance rates of 95% have been recorded in relation to the first group of small and micro employers to implement automatic enrolment. Almost 60% of employers who are still to go through the process are micro firms with between one and four employees, and around 950,000 employers are forecast to implement automatic enrolment within the next two years. It is therefore important that small and micro businesses engage with the process.
The report also found that around three million employees have been enrolled in a master trust, and more than 185,000 employers used the ‘Duties Checker’ tool on the Pensions Regulator’s website between October 2015 and March 2016.
However, the implementation of this statutory process by all businesses, continues to face problems as it has been reported that enforcement action taken against businesses for failing to comply is up by 300%. The Pension Regulator has escalating powers to deal with non-compliance in the form of fines that can accrue on a daily basis. The Pension Regulator can also ndertake investigations and issue compliance notices.
In the next two years 950,000 small and micro businesses will have to put a pension scheme in place. If they do not understand the process they should be seeking advice as soon as possible.