A bus operator has become the first employer in the UK to be found guilty of failing to auto-enrol its staff on to a workplace pension scheme – as experts warned that even businesses making minimum contributions could be leaving themselves open to future legal action.
Oldham-based Stotts Tours and its managing director, Alan Stott, admitted deliberately avoiding setting up workplace pension schemes for 36 staff, despite employees meeting auto-enrolment criteria, the Pensions Regulator reported.
Under current auto-enrolment legislation, anyone earning more than £10,000 a year and aged between 22 and the state pension age is entitled to be automatically enrolled on to a workplace pension scheme.
Employers like Stotts Tours with fewer than 50 staff on their largest PAYE schemes have been legally obliged to place staff into suitable workplace pension schemes and begin making pension contributions since between June 2015 and April 2017.
Stotts Tours pleaded guilty to a total of 16 offences of ‘wilfully failing’ to comply with auto-enrolment legislation. Sentencing is due on 14 December, with a maximum sentence of an unlimited fine.
Minimum auto-enrolment contribution rates are set to rise in April 2018 to 2 per cent, and again in April 2019 to 3 per cent. The Pensions Regulator works on the basis of trying to assist and support employers in meeting their auto-enrolment duties, but there clearly comes a point when education and information isn’t sufficient and court action will be taken.