The Federation of Small Businesses has criticised the “excessive” fines set to be levied on companies that fail to comply with automatic-enrolment rules.
Speaking at TheCityUK’s pensions conference last week, FSB policy chairman Mike Cherry said the initial non-compliance fine of £400 is excessive.
He said: “We are concerned that employers will be penalised for minor errors as opposed to deliberate non-compliance. We have always advocated that a light-touch approach would have been far more appropriate.
“For example, if there must be a fixed-penalty notice for a first mistake, the level that is currently being introduced of £400 seems somewhat excessive. The figure should be much lower.”
A spokesman for The Pensions Regulator says employers will receive several warnings before any fine is issued. He says: “We are working hard to help all employers comply with their new duties and communicating directly with them 12 months before their staging arrives.
“Our focus will be on persistent or intentional non-compliance. The regulator will issue fines to ensure employees receive the pension contributions they are due in law. Before applying a fine we will notify the employer they are in breach of the law, providing them with the opportunity to rectify the breach.”