The Pensions Regulator (TPR) has visited a number of recruitment agencies as part of an in-depth look at certain business sectors in the UK which potentially could face auto-enrolment compliance issues.
The industry regulator says the move is part of its drive to establish a ‘pro-compliance culture’ and has said that it has started with the recruitment sector due to more than 1,000 recruitment employers expected to reach their staging date between April and July next year.
The regulator has said that the visits were made to ‘prevent and tackle possible breaches, ensure compliance, learn lessons and share good practice among the industry’.
Nigel Bolton, pensions partner at top 20 law firm, Irwin Mitchell, said: “We welcome the proactive stance that the regulator is taking here and believe that it is vital they listen to the concerns and issues that businesses are having with auto-enrolment.
“Although TPR is looking at certain business sectors, our own survey into SMEs revealed that across the board, many smaller firms are not effectively preparing themselves for the legislation. Even more worrying was the finding that many thought they were ready for auto-enrolment, but in actual fact they hadn’t looked closely at some of the key issues.
“Once again the regulator here has called for businesses to appoint advisers at least six months in advance of their staging date. We certainly support this, however fear that there are a lot of companies that haven’t taken this step yet.”
Executive director of automatic enrolment Charles Counsell said: “These visits were very positive and employers were willing to engage with us and tell us about their experiences. Engaging directly in this way helps us to get a good understanding of the issues faced by this sector and use what we learn to help others in the industry.
“Over the coming months we will be carrying out more visits to employers in other sectors where we have identified potential compliance challenges. We want to ensure any problems they face are addressed in good time and that they do not run the risk of non compliance – which can come at a cost.”
Institute of Recruiters (IOR) director general Azmat Mohammed added: “Visiting recruiters with a view to ensuring compliance before any penalties are incurred and sharing best practice with other recruiters is a valuable step by TPR. TPR should also ensure dialogue is open with industry bodies to discuss their findings, enabling vital lessons to be shared as widely as possible.
“Regulators need to ensure they facilitate compliance by creating strong sector relationships that allow a regular stream of valuable case studies to filter down to agencies. We want to be confident TPR will work with us to ensure agencies have access to all the information they need as some issues around auto enrolment of temporary workers remains an area of concern.”
Auto-enrolment will mean that eligible UK employers must automatically place their workforce into a qualifying pension arrangement. All employers must contribute to that pension arrangement and must monitor and keep records of their workforce’s membership of the scheme.
The laws came into effect for the UK’s largest businesses last year and from April 2014; firms with a PAYE scheme size of between 249 and 160 will need to be ready. Firms with fewer staff members will be required to comply with the rules by a particular ‘staging date’ according to their size up until 2018.