Jump in pension contribution warnings issued to employers by regulator

November 19, 2020 4:25:12 PM

Jump in pension contribution warnings issued to employers by regulator

The number of warnings issued to employers for failing to make the correct pension contributions for staff has jumped in recent months, according to The Pensions Regulator (TPR).

Its figures show the number of unpaid contribution notices issued nearly tripled between July and September, compared with the previous quarter.

The total surged from 352 to 1,026.

There was also a 17% increase in compliance notices, from 13,185 to 15,420, over the same period.

Both types of notices come under the Pensions Act.

Unpaid contribution notices are issued if the regulator believes employers have missed contributions into a workplace pension scheme. The notices give employers a date for paying the missed contributions.

Employers receive compliance notices when the regulator thinks they have breached their automatic enrolment duties. The notices outline what the employer needs to do to be compliant, and by when.

Tom Selby, senior analyst at AJ Bell, said: “Covid-19 and the subsequent nationwide lockdown has placed unprecedented strain on the balance sheets and day-to-day operations of thousands of businesses.”

Despite the recent uptick, the TPR said there were still far fewer unpaid contribution notices issued in the third quarter of 2020, compared with the third quarter of 2019.

The regulator said it is seeing a slow return to business as usual.

Between July and September 2019, there were 12,384 unpaid contribution notices and 11,202 compliance notices.

TPR said it will be tough with employers who do not comply with their automatic enrolment duties.

Mel Charles, director of automatic enrolment at TPR, said: “Employers may have seen their business change because of Covid-19 but their pension duties have not.

“Employers must remember their pension duties continue and failure to fulfil them may lead to legal action.”