New Report Warns About Auto Enrolment Minimal Compliance

29 November 2017

Warnings on auto enrolment minimal compliance A new report from law firm Eversheds Sutherland has warned employers about minimal compliance with automatic enrolment.

The report, called "Automatic Enrolment and the Law – How Far do Employers' Duties Extend?", summarises the current minimum duties expected of employers and then goes on to explain why employers, and particularly larger employers may wish to do more than the legal minimum. The reason behind this is the growing number of legal cases in the USA where employees have paid damages to employers over the level of pension provision and the risk that future regulators and ministers could decide today's employers should have gone beyond the basic minimum legal minimum requirements, especially if some workers end up with poor pension outcomes.

Potentially, says the report, courts in the future could decide, as they have done regarding other pensions legislation, that employers have an "implied duty" to look after their employees and that they could fall foul of this test if they take a minimalist approach to pensions provision.

Sir Steve Webb, the former pensions minister has called upon financial and pension advisers to engage more with company clients to ensure that they know how to help their staff get the most out of their company pension schemes. This could include making staff aware of the options that they have available to them and illustrating that minimum contributions may not ensure a comfortable retirement.

Mr Webb said: "It's one thing saying that employers need to keep their automatic enrolment scheme under regular review, but they obviously need to know what they are looking for, which is where advisers come in.

"Many larger employers do already take pensions seriously and go well beyond their statutory minimum duties. But all employers should be reviewing their automatic enrolment arrangements on a regular basis to ensure that it remains fit for purpose."

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      Josh was a Business Development Manager at Smart Pension. Josh served as Smart Pension's Business Development Manager from November …