Employers that fail to make payments into new personal pension accounts could be hit by fines of up to £50,000.
The Pensions Bill received its first reading in Parliament last week, and proposes automatic enrolment into a qualifying workplace scheme from 2012.
The Bill would, for the first time, give all staff aged over 22 who earn more than £5,000 a year access to a workplace pension with a minimum employer contribution. Fines may be imposed by the Pensions Regulator if employers do not make payments into personal accounts or do not automatically enrol, or re-enrol, eligible employees into the schemes.
Rachel Vahey, head of pensions development at insurer Aegon Scottish Equitable, said the threat of a fine sent out a strong message to firms. “If employers ignore the legislation, then the Pensions Regulator will issue them with a compliance notice. If they still don’t comply, they could be fined a fixed amount of up to £50,000 and an escalating fine of up to £10,000 a day,” she said.
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