Report highlights the fact that over 800,000 workers are missing out on pension contributions
28 August 2020
A report conducted into auto-enrolment enforcement by think-tank, Resolution Foundation, has highlighted the fact that over 800,000 workers who are eligible to receive a workplace pension have either not been enrolled at all by their employer, or are in receipt of contributions that are less than the minimum required level. This translates to roughly one in 20 employees.
The report raised concerns about the fact that many workers will not be aware that they are not receiving any, or the correct, pension contributions as they have no impact on their net take-home pay, and so workers may only realise there is an issue at a much later date.
The issue seems to be more prevalent for part-time and temporary workers who were over twice as likely not to be enrolled in a workplace pension than their full-time and permanent colleagues. Over one-tenth of agency workers have not been auto-enrolled.
The report highlights the fact that complete non-enrolment is 2.4 times as frequent as underpayment, and that The Pensions Regulator (TPR) has had to issue 2.8 times as many compliance notices, primarily aimed at non-enrolment, as unpaid contribution notices in 2019.
The research was conducted over a period of three-years, and explored labour market enforcement. It wanted to assess whether there are any ‘under-enrolment’ hotspots that need to be focused on. As a result, recommendations are being made to TPR to undertake more proactive enforcement of the auto-enrolment rules and the regulator is encouraged to act in a tougher and more speedy fashion when non-compliance is detected.
The Resolution Foundation believes that the regulator should also focus on the monitoring of small businesses, and contingent and low-paid workers. Further scrutiny should be placed on certain sectors, particularly hospitality and agriculture where non-compliance was recognised as being prevalent.
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