News that Dunelm Soft Furnishings underpaid its initial auto-enrolment contributions by £143,000 as a result of a defective payroll system highlights the importance for all employers to check when their staging dates are and take appropriate action in good time - a year ahead of the staging date would be good.
Staging dates can be checked on the Pension Regulator website, www.thepensionsregulator.gov.uk , using the payroll PAYE reference.
Some employers think that they already have a compliant pension scheme, but this may not be the case, it needs to be checked, and where necessary, a compliant scheme needs to be implemented.
Payroll software also needs to be checked out and the company needs to plan the whole implementation and regular ongoing management of the AE system. Care needs to be taken when selecting a suitable pension provider, some have processes that are far more complicated and time consuming than others.
Depending on the payroll profile, the process can be extremely complex so the sooner the employer acts the better. It is also likely that as the year goes on, pension providers and advisors will become increasingly busy so another reason to get in early before the 'AE Crunch' period.
Statistics show that in 2013 96 employers failed to comply, and so far, between Jan 1st and March 25th 2014 133 employers failed to comply, so non-compliance appears to be on the increase.
The Pensions Regulator (TPR) has confirmed that Dunelm is now fully compliant with its AE duties and up-to-date with its contributions, following work with the firm and its provider.
TPR executive director for auto-enrolment Charles Counsell urged employers to learn from Dunelm's mistake and said the report showed the importance of engaging with the regulator over any AE concerns.
He said: "TPR focuses on a pro-compliance culture and employers and workers understand the 'we're all in' message - 99.9% of employers who have completed registration have done so without the need for us to use our powers. This report shows however, that we will use the powers we have been given to take enforcement action where it is appropriate to do so."
This story demonstrates several things:
It is probable that many more stories like this will emerge. In each case the companies concerned will be caused considerable embarrassment and poor media coverage, which could easily be avoided.
Advice at an early stage is essential and firms which couple financial planning and payroll solutions will be well placed to help other businesses avoid a similar outcome to Dunelm.
If you like this article and would like to subscribe to INSPIRED, our FREE monthly newsletter, then please click SUBSCRIBE.Subscribe