Senior staff found guilty of opting workers out of workplace pension

Senior staff members at a national recruitment agency have been found guilty by the Pensions Regulator of illegally impersonating their temporary workers in order to opt them out of their workplace pension scheme. By doing so, the agency effectively rid itself of the responsibility to pay any pension contributions towards the workers. The agency had a clear aim to illegally cheat the system in order to save itself a considerable about of money.

The agency, as an employer, was legally required to automatically enrol any of its eligible workers into a pension scheme, unless such workers were already members of a qualifying scheme. Once a worker is enrolled, the employer is required to pay mandatory minimum contributions into the workplace pension scheme. This cannot be avoided, unless the worker opts out of the pension scheme. The decision to opt out of a workplace pension scheme is solely the decision of the employee – this decision must be free and fully informed.

In total, the agency opted 67 of its workers out of the pension scheme. These workers did not provide consent to the agency and the act of opting them out of the workplace pension scheme was carried out without their knowledge.

The senior staff members pleaded guilty to the offence of unauthorised access to computer data under the Computer Misuse Act 1990. By falsely logging into the auto-enrolment system as the temporary workers to illegally opt them out of their workplace pension scheme the senior staff had knowingly used a computer, with the intent to secure unauthorised access to the auto-enrolment system, thus satisfying the offence under section 1(1) of the Computer Misuse Act 1990.

This is the first time the Pensions Regulator has prosecuted for this offence. The individuals have not been sentenced yet, however they could be given a prison sentence for up to 2 years and/or an unlimited fine. This case highlights the importance of compliance and will act as a deterrent to those who think they can cheat the system by unlawfully opting their workers out of their pension schemes.