TPR says Dunelm auto-enrolment failures led to £143k underpayment

DUNELM Soft Furnishings underpaid its initial auto-enrolment (AE) contributions by £143,000 as a result of a defective payroll system, a report from The Pensions Regulator (TPR) has revealed.

A ‘Section 89’ reportconfirmed the regulator took action against homeware supplier Dunelm from August 2013 over concerns about its AE provision, reports sister publication Professional Pensions.

Section 89 reports show the regulator’s guidance and undertakings on individual cases.

TPR issued a compliance notice in August 2013 after the firm failed to register the scheme on time, which was followed by a statutory inspection.

The inspection revealed some members’ enrolment was delayed by between one and three months, resulting in an underpayment of £35,000 for its four-weekly payroll and £103,000 for its monthly-paid employees.

Dunelm “openly explained” the contributory factors in the AE failures, including “design flaws” in the firm’s bespoke payroll solution, TPR said.

The report said: “The bespoke payroll solution did not fulfil the Dunelm specification, was ineffective for automatic enrolment and the reporting capability was not fully functional.”

Key members of project staff had also left the company at critical stages of AE delivery, the report added, while data quality issues delayed enrolled of some workers.

Following the inspection, Dunelm paid the missing contributions in respect of its four-weekly payroll, while an Unpaid Contribution Notice was issued for £83,000 for the monthly payroll.

Dunelm subsequently recalculated its contributions and informed TPR it owed an additional £20,000 in contributions.

TPR confirmed Dunelm is now fully compliant with its AE duties and up-to-date with its contributions, following work with the firm and its provider.

TPR executive director for auto-enrolment Charles Counsell (pictured) urged employers to learn from Dunelm’s mistake and said the report showed the importance of engaging with the regulator over any AE concerns.

He said: “TPR focuses on a pro-compliance culture and employers and workers understand the ‘we’re all in’ message – 99.9% of employers who have completed registration have done so without the need for us to use our powers.

“This report shows however, that we will use the powers we have been given to take enforcement action where it is appropriate to do so.”

Last month, PP revealed TPR launched 590 investigations into AE non-compliance to end of January, with compliance and enforcement action being taken in 134 instances (PP Online, 5 March).