The new auto-enrolment rules require all employers to automatically enrol some or all members of their workforce (depending on age and salary level) into a pension scheme which meets certain minimum standards. The legislation has already come into force for large businesses and smaller employers are now following – in the next three years, around 1.8 million small and micro employers will have to comply with the legislation.
The Pensions Regulator (the regulator of work-based pension schemes in the UK) recommends you start planning up to twelve months before your start date, which is known as your staging date.
As an employer you have a number of responsibilities to make sure you comply with the new regulations. Companies who have tried to implement auto-enrolment without professional support have found navigating the rules a real challenge.
To help you decide, use our auto-enrolment check-list below to see what decisions and actions you will need to take – before and after your staging date:
1. Know your staging date
From June 2015, auto-enrolment for employers with less than 30 employees will begin. To find out your pension auto-enrolment date, visit The Pension Regulator’s staging date tool at: http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx
2. Provide a point of contact
The Pensions Regulator will write to small and medium sized firms (SMEs) asking them to confirm the most senior person or business owner as the ‘primary contact’.
3. Understand your responsibilities
The responsibility for complying rests with you the employer. If you do not comply, penalty notices will be issued.
4. Developing a project plan
In preparation for auto-enrolment, create your own timetable to make sure you meet your staging date.
5. Know your workforce
You need to be very clear who you have to enroll and who you don’t. There are three different categories of staff to consider:
• Eligible job holders
• Non-eligible jobholders
• Entitled workers
6. Calculate the costs
The minimum contributions begin at 1% for the employer and 1% for the employee this will rise to 3% for the employer and 5% for the employee by October 2018.
7. Arrange a pension scheme
You may be able use your existing pension scheme (providing it meets certain criteria), or you can set up a new scheme especially for automatic enrolment.
8. Administration of the scheme
Auto-enrolment will impact upon your internal processes and procedures. You will need to review the following and identify if any changes are necessary:
• Terms and conditions of employment
• Existing payroll systems, are they compatible with new requirements.
• Record-keeping, member data must be maintained for 6 years.
You will need to write to your workforce to let them know how they will be affected by auto-enrolment, when the changes will occur and what to expect next.
10. Ongoing duties
You must make sure that you comply with your ongoing responsibilities. Going forward, you will need to monitor your employees’ ages and earnings on an on-going basis and to re-enrol employees who are not in pension saving, broadly every three years, known as re-enrolment.
> To find out more about our auto-enrolment services, call Vanda Cox on 020 7488 7113 or email firstname.lastname@example.org