What could the consequences be for an employer that incorrectly assesses an individual for the purpose of pensions auto-enrolment?

Where the employer should have auto-enrolled an individual but has failed to do so, it must arrange for membership of an auto-enrolment pension scheme and backdate contributions to the correct auto-enrolment date. Whether or not the employer has to make good both the employer and employee contributions in respect of the backdated period will depend on the pension scheme rules. However, if the Pensions Regulator receives a complaint that the employer has failed to auto-enrol an eligible jobholder in a timely fashion and decides that this is a systemic problem that the employer has failed to address, rather than a one-off occurrence, the Regulator can order the employer to make good all backdated contributions itself and take steps to prevent future occurrences.

If the employer has auto-enrolled an individual when it should not have done so, the employer will have to contact the relevant pension scheme and the individual to arrange for a refund and cessation of membership. Where the employer has issued an incorrect notice in respect of an individual's opt-in or joining entitlement, it should inform the individual of any correction to his or her entitlement based on the accurate assessment.

Employers that wilfully fail to comply with key auto-enrolment or re-enrolment duties or fail to enable non-eligible jobholders to opt in to pension membership may be convicted of a criminal offence and subject to a fine and/or up to two years' imprisonment (s.45 of the Pensions Act 2008).