Employers struggling to meet their automatic enrolment duties should raise the alert with the Pensions Regulator sooner rather than later, the organisation has warned.
The alert came as the regulator published its first automatic enrolment report under section 89 of the Pensions Act 2004, designed to help employers avoid non-compliance.
The report, issued on 24 April, set out problems experienced by homewares and soft furnishings giant Dunelm and how the regulator worked with the company to achieve auto-enrolment compliance.
Dunelm had an automatic enrolment staging date of 1 April 2013 and was due to complete registration, indicating that it had fully complied with its employer duties, by 31 July 2013. The company did not complete registration by the deadline and was then contacted by the regulator.
The company fully co-operated with the regulator to put matters right after an inspection at Dunelm found that:
- it failed to enrol members of the four weekly payroll on time. These members were automatically enrolled a month late
- it failed to enrol certain members of the monthly payroll on time. They were automatically enrolled three months late
- the company did not pay across to the pension provider a significant level of contributions as a result of these failings.
The Pensions Regulator said lessons to be learned from the Dunelm case included:
- employers experiencing challenges in meeting automatic enrolment duties should contact the Pensions Regulator to discuss their situation
- payroll systems should be tested well in advance of the staging date to ensure they are able to fulfil the requirements of automatic enrolment.
The regulator’s executive director for automatic enrolment Charles Counsell said: “99.9 per cent of employers who have completed registration have done so without the need for us to use our powers.
"I am pleased to see that the employer in this case is now compliant with their duties.I would urge all employers to take heed from the lessons learned here so that they avoid the same pitfalls."