Research by the Resolution Foundation into auto-enrolment enforcement by has revealed that over 800,000 workers (c.5% of all employees) who are eligible to receive a workplace pension have either not been enrolled at all by their employer, or are receiving contributions that are less than the minimum required level.
It seems that many of these workers will not be aware that they are not receiving any, or the correct, pension contributions as they have no impact on their net take-home pay, with the issue only being discovered at a later date.
The situation is more common amongst for part-time and temporary workers. Both of these groups were over twice as likely not to be enrolled in a workplace pension than their full-time and permanent colleagues. In addition, more than 10% of agency workers have not been auto-enrolled.
Non-enrolment is 2.4 times as frequent as underpayment, and it has been revealed that the The Pensions Regulator (TPR) has had to issue 2.8 times as many compliance notices, primarily aimed at non-enrolment, as unpaid contribution notices in 2019.
The research was conducted over a period of three-years and included detailed exploration of labour market enforcement. It wanted to assess whether there are any ‘under-enrolment’ hotspots that need to be focused on. As a result, recommendations are being made to TPR to undertake more proactive enforcement of the auto-enrolment rules and the regulator is encouraged to act in a tougher and more speedy fashion when non-compliance is detected.
The Resolution Foundation also suggested that the regulator should also focus on the monitoring of small businesses, and contingent and low-paid workers. Further scrutiny should be placed on certain sectors, particularly hospitality and agriculture where non-compliance was recognised as being prevalent.
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