Auto Enrolment Pensions

Information from the Pensions Regulator:

What happens if my client doesn't comply or is late complying?

Our approach to late employers and what we expect

Like all employers, your clients need to comply with their duties under automatic enrolment - it's the law.

We recognise that most employers will want to do the right thing for their staff, and we will work with your clients if they require help to get them compliant. However, if your clients ignore their duties they may face enforcement action.

Key points

the responsibility for complying with the employer duties rests with your clients
if your client doesn’t comply, they may face enforcement action including compliance notices, and penalty notices (fines)
enforcement action usually starts with statutory notices and is followed by penalty notices, which we can recover through the courts
if your client complies late, we expect them to pay back any missed contributions to put staff in the position they would have been in if they had complied on time; this may include backdating contributions to the day that the member of staff first met the age and earnings criteria to be put into a scheme
when backdating contributions, your clients must pay all the unpaid employer contributions and their staff members must pay theirs, unless your clients choose to pay it for them. As part of any enforcement action we may require that your clients pay their staff member's contributions as well as their own
deliberately failing to enrol eligible staff and knowingly including false information in a declaration of compliance are criminal offences and may result in prosecution

If your clients are late complying with their duties

Our overall approach is to educate your clients and enable them to comply with the legislation, putting them in a position to make the right choices and decisions. Your clients should remember that responsibility for being compliant rests with them.

In cases where your clients haven’t understood their duties or have been unable to comply, we'll provide support and work with them to get them compliant. However, if they have chosen to ignore their duties, we may use our powers where necessary to ensure compliance.

If your client is late complying or thinks they might be, they should tell us about it straight away. Our policy is that employers should take reasonable steps to put all workers back in the position they would have been in if they had complied on time. The employer should not profit from their mistake.

For example, if your client fails to enrol a worker into a pension scheme when they should have done, they will need to:

write to their staff to explain how automatic enrolment applies to them
put them in a pension scheme
backdate contributions to the day that their staff first met the age and earnings criteria to be put into a scheme, so that their member of staff does not lose out
your client must pay any unpaid employer contributions and their staff members must pay theirs, unless your clients choose to pay it for them. Your clients may be able to pay these in instalments, but they'll need to check with their scheme if this is an option

How we investigate non-compliance

We have a range of powers for use in our non-compliance investigations.

As well as requesting information from employers voluntarily, we're able to issue formal notices asking for information and we're able to carry out inspections at the employer's premises. We will use the courts to carry out investigations where necessary.

Our investigations are conducted to the highest standards, ensuring we regulate with fairness, transparency and consistency.

Our enforcement options

Our full range of enforcement options is summarised below and is also explained in the quick guide to our compliance and enforcement strategy at the end of this page.

Informal action

Statutory notices

Penalty notices

What to do if your clients have received a penalty notice

Court action

Appealing an enforcement notice

If your client has been issued a notice they can apply to us for a review. Your client's application along with supporting documentation must be made within 28 days of the notice being issued. Upon receipt of your client's application, we will inform you when a decision can be expected.

For more information go to appealing an enforcement notice.