Watchdog warns over illegal cuts to pension provision
UNSCRUPULOUS firms are illegally persuading their staff to opt out of a workplace pension in a bid to cut costs during the pandemic, pension regulators have warned.
Some bosses are trying to nudge workers out of retirement schemes so the firms no longer have to pay their share of contributions, according to pensions ombudsman Anthony Arter.
He told MPs on the work and pensions select committee that the pandemic is triggering a spike in companies seeking to limit what they pay through the auto-enrolment programme, even though this is against the law.
Mr Arter said: “There will be a lot of small employers who will turn to their employees and try and encourage them to opt out of automatic enrolment.”
The Pensions Regulator said it will fine any companies found to be breaking the rules. It has the power to issue penalties up to £50,000. Employers found to have coaxed staff out of their workplace pension will also have to backdate any missing contributions.