Firms could face fines for flouting new pension laws

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New laws come into effect next week banning employers from offering incentives to staff to abandon retirement saving.

Companies which are found to have flouted the new rules could face a substantial fine.

The changes mark the start of workplace pensions reform and new duties which will eventually see all UK employers automatically putting certain staff into a pension scheme and making contributions.

Minister for Pensions Steve Webb said: “Workplace pensions reform will mean that millions of people will be better able to afford the plans they have for retirement – so it’s crucial that they know how the changes affect them.”

The new rules, which come into force on July 1, apply to existing workers, as well as potential new recruits, for example making a job offer or higher salary conditional on not joining the employers’ automatic pension scheme.

Workers can report concerns that the rules are being broken at www.tpr.gov.uk/individuals/reporting-a-concern.aspx

The Department for Work and Pensions and the Pensions Regulator have also created a range of template posters, letters and content for employee bulletins, along with other tips including a pensions language guide at www.tpr.gov.uk/workplacepension to help employers fulfill their legal duties.

Pensions Regulator’s executive director for employer compliance Charles Counsell said: “Employers should be under no illusion that we will take action against any tactics to tempt or pressurise staff to opt out of pension saving.

“This could include a substantial fine.”