The Pensions Regulator auto-enrolment inspections found a “number of errors” in compliance with auto-enrolment, including miscalculation of pension contributions and miscommunication with staff.
The watchdog issued a warning to employers to ensure they are complying with their ongoing auto- enrolment duties, following in-depth compliance inspections of more than 20 large employers across the UK - with almost 1.5mn staff – which were first announced in 2020.
These interventions, designed to check if employers are complying fully with workplace pensions law, were carried out in 2022, and showed “a number of common errors in respect of calculating pensions contributions and communications to staff”.
TPR noted that while these companies had successfully enrolled their eligible staff into a pension scheme and contributions were being made, “administrative errors with their ongoing pensions duties put staff at risk of not receiving the pensions they are due”.
The transport, hospitality, finance and retail firms have now corrected or are working to correct errors, including making backdated contributions, the regulator added.
TPR’s director of automatic enrolment Mel Charles said: “The vast majority of employers are successfully meeting their automatic enrolment duties, however administrative mistakes can put staff at risk of missing out on their pensions and employers at risk of unintended non-compliance.
“While the errors we have found are technical in nature, these types of oversights can indicate broader non-compliance issues.
“Correcting these mistakes can be costly for employers because as well as needing to make backdated payments for staff receiving incorrect contributions, they can also lead to financial penalty.”
The watchdog stated that key errors include using incorrect earnings thresholds, and that TPR guidance should be consulted on this, as well as government guidance on maternity pay since miscalculations in this area can impact pensions contributions.
TPR also published its latest compliance and enforcement bulletin, covering the use of its auto-enrolment and frontline regulation powers between January and June 2022.
On auto-enrolment, the regulator issued 20,382 compliance notices and 13,604 unpaid contribution notices, in line with he figures of the previous period - 20,555 and 13,376, respectively.
During the first six months of the year, TPR issued 15,302 fixed penalty notices, down from 17,284 in the previous semester.
A fixed penalty notice of £400 is issued to an employer for failure to comply with a statutory notice or some specific employer duties.
The regulator also issued 5,918 escalating penalty notices – which varies between £50 and £10,000 a day depending on the size of the company, and is issued if the employer still has not complied – a decrease from 6,988 in the previous period.
During H1 2022, TPR used its statutory powers for frontline regulation in 203 instances, compared to 244 in the previous six-month period.
Maria Espadinha is editor at Pensions Expert, FTAdviser's sister publication
