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Largest Auto Enrolment fine and prison sentences handed out

Since Automatic Enrolment commenced in 2012, almost 10 million people have started saving towards their retirement via a workplace pension.

Unfortunately, some firms still think they can escape the rules, as a national recruitment agency based in Derby has received the largest fine and the first custodial sentence handed out since the legislation came into effect.

The company’s directors and senior staff have been ordered to pay more than £280,000 for plotting to opt workers out of their pension scheme to avoid making pension contributions, which is an illegal act. The employer, directors and five senior staff all pleaded guilty to computer misuse offences after The Pensions Regulator prosecuted them.

At Derby Crown Court on 26 October 2018, the Judge told the defendants their “co-ordinated effort” had been an “attempt to steal a march” on their competitors. “This amounted to a deliberate subversion of the automatic enrolment process.”

The firm has been ordered to pay a £200,000 fine and £60,930 costs and the directors were each given a four-month prison sentence suspended for two years, ordered to complete 200 hours of community service and pay £11,250 costs. The financial controller was given a two month prison sentence suspended for two years, a five-month overnight curfew and ordered to pay £1,500 costs. The HR and compliance officer was given a two-month prison sentence suspended for two years and was ordered to do 200 hours of community service and pay £1,500 costs. The three branch managers were each given a two year community order and ordered to do 150 hours community service and to pay £500 costs.

This illustrates the seriousness with which the Auto Enrolment legislation is being applied and should serve as a warning to employers who try to flout the rules that this simply will not be tolerated.

Read our Key Facts on Auto Enrolment here.

If you have any questions about auto enrolment legislation please get in touch with one of our Financial Planning team.

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