18th June 2014
Millions of employees may be missing out on workplace pension savings in some cases because their employer is at risk of breaching new Government regulations, a leading pension firm has warned.
Under auto-enrolment, the Government must offer a pension scheme and provide contributions if their employees choose not to opt of the scheme.
Pension firm Hargreaves Lansdown says that a new report from the Pension Regulator says that 8,000 employers could have missed their staging date. According to TPR, up to the end of May 2014, 15,099 employers had confirmed their auto-enrolment scheme details.
However a Freedom of Information Request from Hargreaves Lansdown shows that from 1 October 2012 up to 1 May 2014, 22,940 employers should have hit their staging date.
The firm notes that firms have up to 5 months to register their scheme, and with over 14,000 having hit their staging date in the past 2 months, perhaps many of them just haven’t yet got around to it yet.
Nevertheless, these numbers seem to be consistent with anecdotal feedback we’re getting from within the industry that some employers in the current wave of staging are struggling to meet their obligations on time.
Hargreaves Lansdown’s head of pension research Tom McPhail says: “It isn’t yet clear whether this shortfall in scheme reporting is the result of delays in the registering of schemes which are fully compliant, or in fact it is attributable to thousands of employers failing to hit the deadline. We’ll find out one way or the other over the next couple of month.
It also says the many millions of workers may be missing out anyway. The regulator’s latest auto-enrolment report shows that the 15,099 employers who have hit their staging date employ 16,470,000 employees, of whom 8,243,000 are already in a qualifying pension scheme and a further 3,633,000 have now been enrolled in an auto-enrolment scheme.
However Hargreaves Lansdown says this means an even larger number of employees, 4,174,000 have missed out on a work place pension because they don’t fit into any of the categories.