Safeguards

This regime is introducing new financial and administrative burdens on employers and the temptation is there for some unscrupulous employers to avoid compliance.

There have been certain safeguards put in place to ensure this is avoided. The safeguards are not just for existing workers but also for those applying for jobs.

From Staging Date onwards employers have a statutory duty to ensure any worker, not currently a member of a suitable Qualifying Workplace Pension Scheme, is assessed and if deemed Eligible, is automatically enrolled into one. The assessment may be delayed (Postponement) in certain circumstances for up to 3 months.

One area of concern is employers may seek to entice worker to opt-out by offering an inducement or worse still, coercing them into opting-out by threats. This is illegal as a worker’s legal right to accrue pension benefits could be lost if they do not join for these reasons. It does not matter if such an inducement is successful or not for this to be deemed as a breach of the law.

This is clearly a serious matter which deserves an employer’s full attention. The Pensions Regulator has started fining non-compliant employers already.