Out-Law News | 12 Sep 2017 | 11:12 am | 1 min. read
The company, Stott Tours (Oldham) is accused of failing to comply with the law on automatic enrolment. Its managing director Alan Stott is accused of consenting or conniving in the company's offence, or allowing it to be committed by neglect. The offences have been brought under section 45 of the Pensions Act 2008. It is the first time the regulator has launched a prosecution for these offences.
In May the Pensions Regulator published a list of businesses which had failed to meet their automatic enrolment obligations. It said then it could raise prosecutions “in appropriate cases”.
Pensions expert Tom Barton of Pinsent Masons, the law firm behind Out-Law.com, said the prosecution marked a new stage in the evolution of automatic enrolment.
Barton said: “There have been plenty of fines dished out for non-compliance with auto-enrolment legislation. These have generally resulted from procedural errors and oversights including the not-very-good excuse of running out of time. But the use of powers under section 45 is something new. Here we have an employer apparently engaging in intentional non-compliance, which is a serious business.”
“The policymakers have decided that workers are entitled to contributory pensions and it’s as simple as that. If employers want to get in the way of that policy intention then, ultimately, we’re not just talking about fines, we’re potentially talking about a spell behind bars,” Barton said.
Automatic enrolment began for the largest employers in October 2012, and is expected to lead to around 10 million people newly saving, or saving more, towards their retirement by 2018. The rules require employers to automatically enrol their workers into a defined contribution (DC) pension scheme which meets certain minimum requirements, and to make contributions towards the pensions of workers that do not opt out of the scheme once enrolled.
The regulator issued its first fines for breaches of the legislation in October 2014. By last July there had been a steep rise in enforcement action taken by the regulator, but Barton said this was largely due to the roll-out of the programme to smaller businesses.