This summer the Pensions Regulator will be carrying out random spot-checks on business owners who employ staff eligible for workplace pensions.

Details supplied to HMRC by employers are being cross-referenced by the regulator to identify auto-enrolment non-compliance.

The purpose of these checks is to find any businesses that are making incorrect, or no, contributions or failing to enrol eligible workers into a workplace pension.

The Pensions Regulator said its "data and intelligence streams enable it to detect potential non-compliance and take swift action against individual employers".

Regulator fines increase

A recent Freedom of Information request revealed that, in each of the past five years, the total amount of fines issued by the Pensions Regulator increased, although this could be due to more organisations declaring their compliance.

In just the first quarter of 2019, 21,732 cases were closed, according to the watchdog's most recent report and those cases netted more than £68 million in 2018/19, with £14.9m coming from fixed penalty notices and £53.8m from escalating penalty notices.

What is the regulator looking for?

All businesses must automatically enrol into a workplace pension scheme, any worker aged between 22 and State Pension Age, who earns more than £10,000 a year.

Any organisations that fail to comply with the legislation could be the subject of short-notice inspections. These spot-checks began in May 2019 and will continue throughout the summer.

The regulator also seeks to identify employers who may be colluding to encourage workers to opt out of their workplace pension scheme, especially following increases to minimum contributions that were introduced in April 2019.

What are an employer's obligations under a spot-check?

The good news is that, according to the most recent statistics from the Pensions Regulator in April 2019, more than 1.49 million UK employers are complying with auto-enrolment legislation.

However, for non-compliant employers, if an inspector calls, the legislation compels them to allow the spot-check to go ahead without interference and to provide any information requested.

Obstructing an officer or failing to provide requested information are criminal offences that could result in fines or legal action.

What are the penalties for non-compliance?

Fixed penalty notices are set at £400 and are usually handed to employers who fail to comply with auto-enrolment statutory notices.

Escalating penalty notices (EPNs) are issued when employers continue to be non-compliant after an initial warning.

Depending on the number of workers in a business, the EPNs can vary between £50 and £10,000 a day.

We can help

Omnium Benefits can assess your current workplace pension to ensure compliance with legislation. We can make recommendations for a more suitable scheme, if appropriate, and help you put together a benefits package to help reward and motivate your team.

Give us a call today on 01483 205890 to arrange a free, no obligation consultation.