Design flaws in its payroll system, data quality issues and the absence of key members of staff all contributed to Dunelm Soft Furnishings’ failing to make contributions of £108,000 into its auto-enrolment scheme, according to the Pensions Regulator.
A Section 89 report into the employer’s auto-enrolment failures published today identified a series of errors in the process. Dunelm failed to enrol members of the four weekly payroll on time, enrolling them a month late, while members of the monthly payroll were enrolled three months late.
The report says data submitted through the regulator’s registration portal was inaccurate and the declaration indicating compliance with employer duties was wrong. It was also clear that key personnel at an executive level had been unaware of the service of the Compliance Notice directing registration, and the internal governance for ensuring the proper completion of this process had failed.
The report found Dunelm’s bespoke payroll solution had design flaws resulting in significant delay in achieving compliance and completing registration. The bespoke payroll solution did not fulfil the Dunelm specification, was ineffective for automatic enrolment and the reporting capability was not fully functional, says TPR.
TPR also found that key members of staff involved in the automatic enrolment project, including the points of contact, had stopped working for Dunelm at critical points in the automatic enrolment timeline, namely just prior to the staging date and just after registration.
Data quality issues were experienced when uploading employee information to the pension provider, preventing active membership of the pension scheme being achieved.
Due to the significant amount of pension contributions outstanding the regulator served an Unpaid Contributions Notice under section 37 Pensions Act 2008 on Dunelm. Dunelm paid across approximately £35,000 in contributions for the four weekly payroll. The Unpaid Contributions Notice directed the payment of approximately £83,000 in unpaid contributions, which Dunelm had calculated were due in respect of the monthly payroll employees.
Once the Unpaid Contribution Notice was served, having re-examined their calculations, Dunelm informed the regulator that the actual amount owed in respect of the monthly payroll was approximately £108,000.
TPR executive director for automatic enrolment Charles Counsell says: “The Pensions Regulator focuses on a pro-compliance culture and employers and workers understand the ‘we’re all in’ message – 99.9 per cent of employers who have completed registration have done so without the need for us to use our powers.
“This section 89 report shows however, that we will use the powers we have been given to take enforcement action where it is appropriate to do so.
“I am pleased to see that the employer in this case is now compliant with their duties. I would urge all employers to take heed from the lessons learned here so that they avoid the same pitfalls.”