This week, the Pensions Regulator (TPR) faced questions from the DWP's House of Commons select committee on monitoring compliance with automatic enrolment; its communication strategy; and on governance of defined contribution schemes more broadly.

As a first step in assuring compliance, every employer subject to new duties under automatic enrolment will be sent, direct from TPR, a notification letter 12 months before their staging date (and another 3 months before). The select committee questioned whether this was enough time to prepare, especially for the very smallest employers. TPR believes that 12 months is the "sweet-spot", giving enough time but not so long that communications will get buried at the bottom of the in-tray. Thanks to a delay in the roll-out of auto-enrolment for the smallest employers, TPR could have several years to change their mind on this policy. TPR plans to continue its tracker survey every six months (see below for details of December's). Once staging dates have been finalised by the DWP, TPR plans to commence a "Know Your Date" campaign.

TPR was questioned on how it will follow-up with employers who don't register for automatic enrolment purposes. Close co-operation with HMRC should allow TPR to identify employers dragging their heels. A compliance notice will be issued with a fixed penalty notice the next course of action. The initial fine will be a flat £400 followed by a fine that will escalate, on a daily basis, according to size.

TPR was also asked how it will know if employers have actually enrolled staff in a qualifying scheme. It hopes that a signed declaration will be adequate, although it will have a validation process to check the format of the scheme's reference number (if not actually checking the scheme's existence). TPR plans to do some spot checking too, but it will largely fall to whistle-blowers to notify TPR of wrongdoers, especially in cases where employers have coerced employees to opt-out.

From the discussions, it is clear that for automatic enrolment to be successful, TPR has placed a great onus on effective employer engagement with the process of workplace retirement provision. On the issue of late or non-payment of contributions by employers, TPR stated it "will not act as debt-collector to the industry". Over the next few months, TPR will be consulting on revisions to its Codes of Practice on the subject for occupational money purchase schemes and personal pensions. It is prepared to take action where the employer displays a "won't pay attitude" through wilful failure to pay contributions.

TPR was pressed on how it plans to stop charges increasing once a jobholder is enrolled. Whilst it has been very open about its negative view of active member discounts, it seems TPR won't be drawn into tackling this subject head on. It acknowledges that complexity within charging structures makes comparison difficult. However, it is an issue for the employer-provider relationship or, in contract-based schemes, tackled by the Treating Customers Fairly requirements of the FSA. TPR considers the use of a charging cap a "rather blunt tool".

TPR already has a number of web tools to support automatic enrolment and it plans to provide these in 7 languages; more if necessary. There will also be foreign language speakers at contact call centres.

In another proactive step, it has issued an open letter to the payroll software industry calling on developers to share details of planned product offerings and delivery timescales. Charles Counsell, Executive Director for Employer Compliance closed the letter by saying, "The success of workplace pensions reform is dependent on your support and engagement."

TPR's Chief Executive, Bill Galvin, was very diplomatic when asked by the committee whether the industry would be better served by one regulator rather than by TPR and the FSA, as at present.