Dunelm Soft Furnishings underpaid pension contributions due under auto-enrolment by £143,000, according to The Pension Regulator’s (TPR) first automatic-enrolment section 89 report, which highlights key lessons to help employers avoid non-compliance.
Dunelm reached its auto-enrolment staging date on 1 April 2013 and was due to complete registration, indicating that it had fully complied with its employer duties by 31 July 2013. When the retailer did not complete registration by this deadline, it was contacted by TPR.
After being given a number of subsequent opportunities to complete registration or to notify the regulator of any outstanding issues, TPR issued a compliance notice under section 34 of the Pensions Act.
Dunelm subsequently completed registration on 15 August 2013, however, further investigation by TPR found several breaches of the legislation.
TPR found that Dunelm had:
- Failed to enrol members of the four weekly payroll on time. These employees were automatically enrolled a month late.
- Failed to enrol certain employees of the monthly payroll on time. These members were automatically enrolled three months late.
- Did not pay across to the pension provider a significant level of contributions as a result of the failures above.
Following TPR’s inspection and serving of an unpaid contributions notice under section 73 of the Pensions Act, Dunelm paid approximately £35,000 in contributions for its four-weekly payroll.
It then paid a further approximately £108,000 in pension contributions into the scheme relating to employees on its monthly payroll.
Dunelm attributed its failings to three key contributory factors. These were:
- Problems with the design of its bespoke payroll solution, which was not deemed to meet its specification, was considered ineffective for auto-enrolment and did not have a fully functional reporting capability.
- Key members of staff involved with auto-enrolment had left the organisation at key points during the process
- The organisation experienced data quality issues when uploading information to its pension provider.
Dunelm is now fully compliant with its auto-enrolment duties after working with the TPR and has paid all outstanding contributions.
A Dunelm spokesperson said: “We have acknowledged the organisation’s shortcomings in this process and have been open, forthcoming and fully co-operative with the regulator while we endeavoured to address these issues as quickly as possible.
“The delays related to unforeseen staffing issues as well as problems with the organisation’s bespoke payroll solution.
“The regulator has confirmed that we are now fully compliant with our automatic-enrolment duties. We have also reviewed our internal systems to ensure these issues do not happen again.”
Charles Counsell, executive director for automatic-enrolment at TPR, added: “The Pensions Regulator focuses on a pro-compliance culture and employers and workers understand the ’we’re all in’ message. 99.9% of employers which have completed registration have done so without the need for us to use our powers.
“I am pleased to see that the employer in this case is now compliant with its duties. I would urge all employers to take heed from the lessons learned here so that they avoid the same pitfalls.”