All employers will eventually be required to auto-enrol eligible workers in a pension scheme. By virtue of the Pensions Act 2008, by 2018 it is estimated that 10 million workers will be saving more as a consequence of auto-enrolment.

The experience of shoe retailer Johnsons Shoes Company acts as a cautionary tale for all employers. The Pensions Regulator issued a compliance notice after the company failed to provide the Regulator with a declaration of compliance in good time after it passed its auto-enrolment staging date. The Regulator issued a fixed penalty notice of £400 and when the company still failed to comply it issued an escalating penalty notice which increased by £2,500 per day. A penalty of £400 quickly grew to £40,000. After the Regulator commenced court proceedings and the company filed a defence which looked doomed to fail, the company ended up paying the £40,000 penalty plus an extra £2,000 for the court fees.

The lesson for all employers is to take early professional advice on your pension responsibilities. Take advice before there is a problem. Never bury your head in the sand and hope that a problem will just go away. If you do, the experience of Johnsons Shoes Company shows the Pensions Regulator might just walk all over you.

To discuss auto-enrolment or for more information on this blog please do not hesitate to contact our experienced Employment team for a free and confidential discussion on 01924 387 110.

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