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Automatic Enrolment and You

The law on workplace pensions has changed. All employers are legally required to automatically enrol certain staff into a pension scheme and make contributions. You will also have to tell your staff about the scheme you put them in and allow other staff to join if they request to do so.

Automatic Enrolment: the main steps:

12 to 9 months before staging:
Know when you need to be ready

You must be ready to start enrolling staff from your staging date. This date will appear on letters from The Pensions Regulator about automatic enrolment. If you don't have a letter, you can find out your staging date by entering your PAYE reference into the tool on www.tpr.gov.uk/staging-date

9 to 0 months before staging:
Find out who to enrol

You will have to assess all your staff for eligibility but you may not have to automatically enrol all of them. The table below outlines your duties depending on the salary of your employee.

auto enrolment ages and salaries

It's against the law to take any action to induce anyone to opt out. Examples of this could include persuading or forcing staff to opt out by offering them a cash bonus to do so, or by withholding a pay increase until they opt out.

9 to 0 months before staging:
choose a pension scheme

If you have an existing scheme for your workforce (perhaps called a 'stakeholder scheme') you should check with your pension provider to see if you can use it for automatic enrolment. If you need to open a new scheme, make sure you approach a pension provider in good time because they will be taking on thousands of employers in the coming months. DON'T LEAVE IT TOO LATE...

The Government has set up a pension scheme called the National Employment Savings Trust (NEST) to accept all employers wishing to use the scheme for automatic enrolment. This is one option and there are other providers available.

Staging date:
automatically enrol your staff

At your staging date you will need to identify which members of staff to automatically enrol and which will have a right to join your pension scheme on request. If we run your payroll, we are able to do this for you. By this point you will already know what information your scheme provider wants from you, so make sure you send this to them promptly. Make sure you pay the contributions across to the pension scheme before the deadline your provider has given you.

Up to 6 weeks from staging date:
tell your staff

After your staging date, you must write to your staff about how automatic enrolment affects them. There are template letters available on the Pensions Regulator website at www.tpr.gov.uk/writing. If we run your payroll, then we are able to assist you with this.

Up to 5 months from staging date:
Complete your declaration of compliance (registration)

You must complete your declaration of compliance when you've automatically enrolled your members of staff. This confirms to The Pensions Regulator that you have fulfilled your legal duties. You may find it helpful to track your progress by starting your declaration early. It must be complete up to five months from your staging date.

Continuing:
Maintain records

As with real-time PAYE, you must keep records of your automatic enrolment activities. This will include the information you sent to your pension provider and copies of any opt-out requests you receive.

Continuing:
Fulfil ongoing responsibilities

For automatic enrolment there are minimum contributions you must pay in order to comply with your duties. These are a percentage of earnings and are shown in the table below.

auto enrolment minimum contributions

Your worker may also pay pension contributions which you need to make sure you deduct and pay to the scheme on time.

Automatic enrolment is not just something that happens at your staging date - it is an ongoing duty. You'll need to check every payday to see whether any of the members of staff who weren't automatically enrolled are now entitled to be put into the pension scheme (for example if they have reached their 22nd birthday)

After you have automatically enrolled your staff members, they may ask to 'opt out' of the pension scheme. You must then stop deductions of contributions and arrange a refund of any contributions they have paid to date. Staff who have not been automatically enrolled may ask to join a scheme.

This information has been reproduced from The Pensions Regulators publication 'The essential guide to automatic enrolment for employers'.

 

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Alison is a wonderful help, and is always at hand to sort out queries regarding staff holiday pay, and sick pay issues, even after I have run the monthly payroll. Her quick response resolves most things, and it's like having someone behind you in the office doing it for you!

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