Pensions auto-enrolement update
The safeguards designed to protect workers' automatic enrolment rights are now in force (as from 30 June 2012). These apply immediately to all UK employers, regardless of their size or automatic enrolment staging date. So employers are now prohibited (well in advance of their staging dates!) from doing any of the following:
- taking any action to induce workers to opt-out of a qualifying pension scheme - including offering any compensatory payments, other benefits as an alternative
- during the recruitment process, asking candidates whether or not they plan to opt-out, or making any statement (whether written or verbal) that either states or implies that the offer of a post could depend on whether or not they opt-out of an automatic enrolment pension scheme
- treating workers detrimentally (or dismissing them) where they seek to enforce their pension rights - this would include refusing promotion or training to someone who decided not to opt- out, or refusing or reducing a pay increase if it would bring the worker within the band of earnings that would make him/her eligible for auto-enrolment etc.
Compliance notices will be issued to any employer found guilty of breaching these prohibitions, and the Regulator may also impose a fine of up to £50,000 for contravening the prohibition against inducing opt-outs and a fine of up to £5,000 for contravening the rules on recruitment conduct. From an employer's staging date, an employer may be subject to criminal proceedings if it 'wilfully' fails to comply with its automatic enrolment duty, its re-enrolment duty or its duty to enrol jobholders who opt-in. Criminal proceedings may also be commenced against company directors and partners in a partnership who were party to the default by the employer. Any person who is found guilty of wilful failure to comply with their automatic enrolment duties may imprisoned, fined or both.