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UK – Pensions regulator targets recruiters in auto-enrolment compliance checks

21 November 2013

The Pensions Regulator has carried out the first in a series of in-depth fact finding visits to business sectors that may face automatic enrolment compliance challenges, including the recruitment industry. The move marks the launch of a proactive drive towards different sectors and demonstrates how the regulator will use direct intervention to ensure employers comply with their statutory duties and help establish a pro compliance culture

The regulator’s automatic enrolment compliance and enforcement team visited a number of recruitment employers where they were able to have an in-depth look at how these employers are implementing automatic enrolment.

The recruitment sector was identified through the regulator’s intelligence work in line with the compliance and enforcement proportionality framework, which is part of the automatic enrolment compliance and enforcement policy.

According to the regulator, the recruitment sector faces significant compliance challenges and was particularly important to target because more than 1,000 recruitment employers are due to reach their staging date between April and July next year. The staging date is when an employer’s automatic enrolment duties are switched on.

The visits were made to prevent and tackle possible breaches, ensure compliance, learn lessons and share good practice among the industry. The regulator wants to reduce the likelihood of enforcement action by identifying and, where possible, addressing problems early. As a result of information gathered from the visits, the regulator will be issuing compliance guidance tailored for the recruitment sector.

Executive director of automatic enrolment Charles Counsell said: "These visits were very positive and employers were willing to engage with us and tell us about their experiences. Engaging directly in this way helps us to get a good understanding of the issues faced by this sector and use what we learn to help others in the industry.”

"Over the coming months we will be carrying out more visits to employers in other sectors where we have identified potential compliance challenges. We want to ensure any problems they face are addressed in good time and that they do not run the risk of non-compliance - which can come at a cost," he concluded.

Kate Shoesmith, Head of Policy for the Recruitment and Employment Confederation (REC), added: "Recruiters want to be compliant and the REC is pleased that The Pensions Regulator recognises the additional barriers that recruiters face and is working with the industry to address these issues. The process does not lend itself easily to an atypical workforce and recruiters have had to work hard to ensure that their businesses are ready for automatic enrolment.”

"Over the last 12 months, many recruiters have successfully dealt with the challenges that the industry has faced and we will continue to work with the regulator to ensure that the remaining recruiters who are yet to reach their staging date are supported through the process," she stated.

The regulator is urging the industry to make sure their chosen pension scheme and software provider can meet their needs. Employers must start communicating with providers in good time and test payroll systems ensuring they allow enough time, before their staging date to address any complications. Employers must also plan how they will best communicate with workers and leave plenty time to accurately assess their workforce.

The Pensions Regulator recommends that employers should have providers and advisers in place at least six months before their staging date. The staging date is the date when an employer’s automatic enrolment duty is switched on.

For further information regarding auto-enrolment, please visit The Pensions Regulator website

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