First boss to be sentenced for failing to set up pension for staff

14 November 2017

Bus company, Stotts Tours in Oldham and its managing director, Alan Stott have pleaded guilty of failing to provide a workplace pension to its staff.

Mr Stott and the company admitted 16 charges of wilfully failing to comply with the law on workplace pensions.

According to The Pensions Regulator (TPR), 36 members should have been auto-enrolled into a workplace pension since June 2015, and its investigations concluded that Stott’s failure to do so was deliberate.

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Under auto-enrolment rules, all UK employers are required to set up a workplace pension for all members of staff that meet certain eligibility criteria and pay contributions on their behalf, based on their earnings.

Failure to comply is a criminal offence, punishable with an unlimited fine in the magistrate’s court or up to two years imprisonment.

The Stotts case – which was heard at Brighton magistrates court on the 10 November has now been adjourned for sentencing on 14 December.

The Pensions Regulator is also pursuing Stotts Tours separately for £14,400 in civil fines.

‘This is a real wake up call to employers’

Commenting on the case, Darren Ryder, TPR’s director of auto-enrolment says:

 “Dozens of staff at the company were entitled to workplace pensions but were denied them because their employer deliberately failed to set them up.

“Automatic enrolment is not an option, it is the law. Employers should be in no doubt that if they wilfully refuse to become compliant they could end up with a criminal record – and will still have to give their staff the pensions they are due.”

Nathan Long, senior pensions analyst at Hargreaves Lansdown says the case provides a stark warning of the power of the regulator.

“The news that the first employer is facing sentencing in mid-December for their part in denying staff the opportunity to save for retirement, should be a real wake up call to employers of all shapes and sizes.

“While more than 20,000 employers have already been fined for not properly signing their staff up to a workplace pension, this is the first time criminal charges have been brought. Generally auto-enrolment has been embraced by employers, so it is good to see the regulator acting to punish those that have deliberately not complied.”

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