Regulator investigates ‘shape-shifting’ firms who shirk duties on employee pensions
The Pensions Regulator said today it will hunt down companies that change their names to dodge workplace pension obligations.
Several small and medium-sized employers have tried to employ “shape-shifting” tactics to avoid paying their staff’s pensions, it said. Those breaching their auto-enrolment duties could be subject to “short-notice inspections”.
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The regulator also suspects “rogue advisers” could be suggesting the plan to companies so they can avoid paying out.
TPR investigators are now working with counterparts at the Insolvency Service and other agencies. The organisations will take action against offenders that try to use this ploy.
Businesses must automatically enrol eligible workers into a workplace pension and make contributions to it. These must be at least three per cent of an employee’s pensionable earnings.
But the regulator suspects a “small minority” of employers could be opening new businesses and transferring their workers across. They then dissolve the original company, in an attempt to shirk responsibility.
It is now looking into cases involving scores of employees who have been denied the pensions they are entitled to.
TPR’s automatic enrolment chief Darren Ryder, said: “Some bosses might think that changing the name of their company they can avoid their duties but they should know they are on our radar.
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“We are aware of the camouflage they are trying to use and will not be fooled by it.
“We will not tolerate any attempt to deny employees the workplace pensions they are entitled to – and will take action against those who try to dodge their duties.”
Main image: Getty