It’s unlikely you haven’t already heard about Auto Enrolment but for those who haven’t; Auto Enrolment legislation introduced by the UK government means that all UK employers must automatically enrol eligible jobholders (employees) into a workplace pension and pay a minimum employer contribution. Over 250,000 employers have already enrolled more than 6.7 million people in UK pension schemes and it’s now the turn of the country’s smallest employers to auto enrol their
workers.
Who should be enrolled in a pension scheme at my business?
As an employer, it is your duty to auto enrol workers who:
- Are between the ages of 22 and State Pension
Age
- Earn more than £10,000 per year
- Work in the United Kingdom
Workers earning less than £10,000 per year can request enrolment in to the pension fund. If their monthly gross earnings are between £486 and £833, employers must pay regular
contributions into their pension schemes. Employees under the age of 22 or over the State Pension Age and still working can also request to opt in if they wish.
Who needs to do this and what happens if I don’t?
Workplace pension’s law applies to everyone who employs at least one member of staff.
Those who do not comply with the new workplace pension scheme will face fines and prosecutions by the Pensions Regulator.
What do I do next?
If you haven’t already, the first step is to find out your ‘staging date’; this is largely determined by the size of your business and is the deadline date
you must work towards.
The biggest firms have already passed their staging dates but many small to medium businesses are coming up over the next 18 months. If you are unsure of your staging date, you can look it up on The Pensions Regulator’s website.
There are 6 steps to Automatic Enrolment
- Twelve to Nine Months before Staging
- Provide a point of
contact
- Develop your initial plans
- Nine to Zero Months before Staging
- Find out who needs to be enrolled
- Choose your software and check records
- Choose the relevant pension scheme
- Let you staff know that this change is coming and what it means for them
- Decide whether you will use postponement in terms of assessing your
employees
- Staging Date
- Ensure assessment of your workers is carried out and Automatically enroll eligible employees and those choosing to join voluntarily
- Up to Six Weeks
after Staging Date
- Because you can postpone the first time you assess and enrol your employees into your pension scheme for a maximum period of 3 months, you you must issue a postponement notice within 6 weeks of your staging date.
- Up to Five Months after Staging
Date
- Complete your declaration of compliance (registration and certification)
- Ongoing: Keep records
- Fulfil your ongoing responsibilities (including
ongoing assessment of your workforce).
This email is for information only for our clients and contacts, but if you need help finding a pensions provider drop me a line and I'll be happy to help.
Noel Guilford
Noel Guilford is the principal of Guilford Accounting a small business accountancy practice specialising in advising owner-managed businesses on current accounting, finance, and tax matters. You can reach him via email at noel@guilfordaccounting.co.uk or by phone at 01244 660866. He is the author of the best selling book 'Figure it out - an entrepreneurs guide to understanding your business numbers' which you can obtain by visiting http://guilfordaccounting.co.uk.