Changing the name of your business doesn’t change your auto enrolment duties

automatic-enrolment-blog-july-2019If you get married and change your name, those you owe money to don’t forget you. If you move house, your debts remain tied to your credit record.

It might seem obvious, then, that an employer that decides to change its identity cannot simply shake off the bills it has left unpaid.

Yet a trend we are investigating involves employers trying to dodge their workplace pension responsibilities by changing their name. If they were allowed to get away with this, they could avoid paying the pension contributions of their staff.

There is nothing wrong with genuine rebranding. But rebranding has no impact on your automatic enrolment duties – you are still the same entity and we will take action against you if you try to deny your staff the pensions they are entitled to.

Employers shouldn’t think they can pull the wool over our eyes. We’ve visited a number of such employers during our routine inspections across the UK, and taken regulatory action.

But it’s important that employers continue to stay on top of their duties, for instance if they are going through re-enrolment or taking on seasonal workers. They must continue to check whether any of their workers should be put into a pension scheme – or put back into one if they have previously opted out – and have to re-declare their compliance. We’ve created a new re-enrolment duties tool on our website to help employers quickly work out what they must do.

We’ve moved away from visiting employers based on geographical location.  We have sources of information coming to us that will identify those who are operating outside of the law, such as via HMRC and whistleblowing workers.

Employees are becoming more and more aware of their rights and we are increasingly seeing that workers are willing to blow the whistle on their employer if they think they are not being given the pensions they are entitled to. Employers themselves even come to us to report that they think they might have broken the law, albeit unwittingly.

Employers who set up ‘shell’ pension schemes to appear compliant but never pay contributions are a key target. They comply with the letter of the law but that’s it – they never pay the pension contributions due for their workers. Sadly for them, we work with scheme providers and can see where this is happening and take action – as hundreds of non-compliant employers have discovered to their cost.

Another stream of employers we often visit involves those who have been given an escalating penalty notice and then paid it, yet have still not become compliant. Increasingly we’re saying to them: “What are you doing? Why would you rather pay a disproportionately large fine rather than just comply with AE?” After all, they still have to comply with the law anyway – they are paying a fine and still having to become compliant.

Other employers claim that they have no workers, and yet we can see from our data that they are paying wages, while some others claim that they are no longer employers – despite the fact that we can see from our records that there are still staff on their payroll.

And then there are those who appear on our radar because they set off alarm bells on more than one of our systems at once. Examples of this are where we can see they have very high opt-out rates, which may prompt us to suspect that they are inducing workers to pull out of their pension scheme, such as by offering them cash upfront instead.

The message to non-compliant employers is that we will visit you whoever you are, wherever you are. We will go anywhere across the country to inspect an employer – we’ve visited Northern Ireland, Scotland, Wales and all parts of England in the last 12 months.

If you stick your head in the sand about your duties and think that is an excuse, it isn’t.

If you think becoming compliant will mean any fines that you have been issued with will go away, they won’t.

At the same time, if you think paying your fine means you don’t have to become compliant, it doesn’t.

We are not a paper tiger. We have the means to identify non-compliant employers and the will to act against them.

Our intention is always to get employers to comply with the law. If you are not compliant you should be prepared for a knock at the door – and for us to take action against you.


Darren Ryder roundel 1

By Darren Ryder
Director of Automatic Enrolment