The amount of companies being fined for not implementing the auto enrolment scheme for workplace pension is now on the increase.
The Pensions Regulator has announced that during the last quarter of 2014, 166 smaller firms had been fined £400 for not being ready in time to enrol their employees into a company pension.
Prior to this, just three firms had been penalised.
The announced doesn’t come as much of a surprise as more and more medium sized company are included in the scheme, and as the scheme continues, reaching down to very small companies with just a handful of employees, this number is bound to increase vastly.
The auto-enrolment scheme began in 2012, when the Coalition announced that all private sector employees over the age of 22 and earning more than £10,000 per year would be automatically be entered into a workplace pension. It was then down to the employee to ask to be withdrawn if they didn’t want to continue saving in this manner.
It is hoped that around 10 million employees will be paying into a workplace pension for the first time once the project is complete in 2018.
The scheme started with large companies who employed more than 150 staff and the take-up was extremely positive with approximately 9 out of every 10 workers continuing to pay into the scheme.
Towards the end of 2014, the scheme was extended to smaller companies who employ between 62 and 149 people.
To date, more than 43,000 companies have their staff enrolled into the new workplace pension schemes, and another 32,000 will be included by the end of the financial year.
Companies are required to submit a declaration of compliance to the Pensions Regulator five months before their given start date, and so far 166 companies have not got this official document in place in time.
From the end of the year towards 2018, a further 770,000 small and micro companies will be expected to join the scheme, as the initiative works down towards the smaller companies, often who only employ a handful of people, it is more likely that vital paperwork will not be filed in time and more fines will he handed out.