TPR warns employers of AE duties following administrative errors

The Pensions Regulator (TPR) has warned employers to ensure they are complying with their ongoing automatic enrolment duties, after inspections revealed a number of common errors.

According to the regulator, recent inspections to check employers are complying fully with workplace pension laws revealed a number of common errors in respect of calculating pensions contributions and communications to staff.

In particular, the regulator found that while the inspected firms successfully enrolled eligible staff into a pension and made contributions, administrative errors with their ongoing pensions duties put staff at risk of not receiving the pensions they are due.

The regulator confirmed that the firms, which were across the transport, hospitality, finance and retail sectors, have now corrected or are working to correct errors, including making backdated contributions.

However, TPR has urged employers more broadly to ensure they do not skip important steps in complying with their ongoing duties and to consult TPR’s online information.

The regulator suggested that the use of incorrect earnings threshold is one key error which can lead to employers needing to make costly backdated contributions, urging employers to consult TPR guidance on this.

In addition to this, employers were urged to check government guidance on maternity pay, as miscalculating this can impact pensions contributions.

TPR director of automatic enrolment, Mel Charles, suggested that employers should check their systems and processes are up to date when completing re-enrolment, which is required every three years.

"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," Charles continued.

“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 warning was published alongside TPR's latest compliance and enforcement bulletin, which showed that the use of powers of powers in the first half of this year has remained broadly steady compared to the previous period from July to December 2021.

According to the update, TPR issued 20,382 compliance notices, compared to 20,555 for the previous period, as well as 13,604 unpaid contribution notices, up from 13,37.

This was in addition to 15,302 fixed penalty notices, compared to 17,284 in H2 2021, and 5,918 escalating penalty notices, compared to 6,988.

The total number of statutory powers used was 203 compared to 244 in the previous six-month period, which included TPR’s prosecution of two fraudsters for their roles in a scam that saw over 200 savers tricked into transferring £13.7m into fraudulent schemes.

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