Warning to employers not providing pensions for staff

All employers must provide workplace pensions for staff that meet the employment status and earnings criteria. If they don't they risk fines and a criminal record

Employers who don’t provide a pension scheme for staff face unlimited fines. The warning comes as an accounts manager who tried to hide the fact that restaurants had not given their staff workplace pensions has been ordered to pay £5,000.

Bradford-based Mansoor Nasir submitted false declarations of workplace pension compliance to The Pensions Regulator (TPR – the regulator of work-based pension schemes in the UK) to claim that nine restaurants were giving their employees the correct benefits.

TPR found, on investigated, that Nasir had failed to automatically enrol 103 staff into workplace pensions at the restaurants for which he was the payroll adviser in Birmingham, Manchester, Yorkshire and the North East. He tried to cover this up using false declarations between September 2014 and May 2017.

Nasir pleaded guilty to nine charges of knowingly or recklessly providing TPR with information which was false or misleading, contrary to section 80 of the Pensions Act 2004, when he appeared at Brighton Magistrates’ Court on 9 January.

Sentencing Nasir at the same court on 6 February, District Judge Teresa Szagun told the qualified accountant that his actions had been “deliberate”.

Szagun said: “This legislation is to plan for the financial security of a growing and ageing population. The mischief has an impact not only for those individuals involved but for society as a whole.”

Nasir who is based at Beaumont Management Services in Duncombe Road, Bradford, was ordered to pay a £3,320 fine, £1,560 costs and a £120 victim surcharge.

Darren Ryder (pictured above), director of automatic enrolment at TPR said: “Nasir claimed he didn’t know what he needed to do to put the staff into their workplace pensions but instead of asking us for help he put his head in the sand.

“There is guidance on our website and we also have people on hand to offer employers and advisers help on how to comply with their automatic enrolment duties.

“Nasir’s lies to us have now left him with an entirely avoidable bill and a criminal record.”

Knowingly or recklessly providing false information to TPR is an offence under section 80 of the Pensions Act 2004. It carries a maximum sentence in a magistrates’ court of an unlimited fine.Every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it, under what is called ‘automatic enrolment’. TPR advises: ‘If you employ at least one person you are an employer and you have certain legal duties.’

In April, contribution rates to pension schemes will rise with employers obliged to contribute at least 3% and employees 5% of earnings.

See also: The Small Business guide to HR

However, Tom McPhail, head of policy at financial services company Hargreaves Lansdown said these levels are not high enough.

“The pensions industry keeps demanding the government increase the statutory minimum contributions but they’re barking up the wrong tree. The answer to getting contribution rates up to an adequate, or even a good level lies in engaging members to make individual choices about how much they should be saving. It also lies in encouraging them to take control of their investment choices so they can make the most of the money they do save. For many pension scheme members, the default fund is not the best answer.”

McPhail highlights concerns that the increase in contributions in April will prompt an increase in opt-outs, with more employees baulking at the increase in deductions from their pay. While there has been no evidence of this so far, with opt-outs currently running at below 10% of members, he adds: “In theory, a hard no-deal Brexit in March, closely followed by an increase in deductions from peoples’ pay could be a toxic combination, leading to an economic slowdown, increased opt-outs or both.”

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