The total value of fines issued by The Pensions Regulator (TPR) more than trebled in a year to £42m, according to law firm Clyde & Co.
Data obtained directly from TPR revealed that the value of fines increased by £12.6m to £42m between March 2017 and March 2018, £11.5m of which was handed down in fixed penalty notices and £30.5m in escalating penalty notices.
This increase continues on the trend from the previous year, when the value of fines rose by 12 times in a year, from £1.09m to £12.6m.
Clyde & Co head of pensions, Mark Howard commented: "The exponential rise in fines since the introduction of automatic-enrolment legislation is monumental.
Even more concerning for employers is that TPR has just announced its new approach to regulation promising to be a quicker, more proactive and tougher regulator. Given that fines have already trebled in the last 12 months, this makes it critical for employers to fully get to grips with their pensions duties.”
TPR can issue a fixed penalty of £400 for failing to enrol employees into a pension scheme. If the employer fails to comply, they will be issued with a compliance notice. If they continue to not comply following the notice, TPR can issue a further £400 fine.
The next step for continued non-compliance is an escalating penalty notice for unpaid contributions, the fines for which vary depending on the size of the employer.
Howard continued: "The rise in value of the escalating penalties is staggering. These are daily penalties and so can rack up quickly. Burying your head in the sand is not sustainable approach. The longer the problem is ignored the worse it will get as the fines will continue to come through the letter box.”