Even if you already offer pension arrangements for your workers, you may not have a qualifying scheme in place and you’ll still have some new obligations to meet too.
Why is Auto Enrolment relevant to me and why do I have to do it?
As an employer you’ll be legally obliged to automatically enrol your employees into a workplace pension, rather than them actively choosing to join your scheme; and If they don’t want to be in, they must actively opt out.
How will it affect my current business processes?
In addition to your regular payroll and pension processes, there are additional tasks you’ll need to do to make sure your workers are enrolled and you remain compliant with the new legislation.
As an employer, you will be required to:
1. Assess the eligibility of your workforce
2. Review your current workplace pension arrangements
3. Communicate information to your employees
4. Facilitate opting out requests and refunds
5. Keep accurate & up-to-date records
6. These responsibilities may cost you time, money and added strain on your resources.
It is important to get clear guidance on your needs and requirements. Larger employers may have a Human Resource Department that is fully able to meet the extra demands of what Auto Enrolment brings. Other, smaller employers may need much more help and assistance when it comes to arranging a work place pension for their employers.
There are a number of providers in the market place that can provide help to employers ranging from help with your payroll requirements to companies that are able to provide a full end to end package.
Who do I need to put into a pension scheme?
There are a number of things to consider when determining which of your workers will be eligible for automatic enrolment.
You must automatically enrol employees who are:
• between 22 and state pension age;
• earning over £9,440 each year;
• working in the UK.
Employees that don’t meet the criteria above may also be able to opt in to a pension scheme and you will be obliged to enrol if they ask to be, however, the rules and requirements on contributions will be different and you may not need to make an employers contribution for those people.
As you can see, assessing the eligibility of your workforce will be time consuming and possibly quite confusing depending on the number of employees you have. Find out what category each of your workers will fall into here.
When will I need to act?
Each employer will be given a date from which the changes will have to be in place. This is known as your auto enrolment ‘staging date’.
Your staging date will be broadly based on the number of people you have in your PAYE scheme. As a small or medium business, your staging date is likely to be between 2014 and 2016.
The pension’s regulator will contact you 6 to 12 months before your staging date. If you’d like to know when Auto Enrolment is likely to affect your business, take a look at The Pensions Regulator’s staging timeline.
Where do I start?
The first things you should do to start your preparation are:
1. Find out your staging date to see how much time you have to prepare (preparation should start around 18 months prior to your staging date)
2. Familiarise yourself with the legisaltion and what you’ll need to do in the run up to your staging date.
3. Get ready to communicate with your workers.
4. Track and monitor your progress.
5. Make sure you’re fully trained on the new legislation and understand how to stay compliant. View our range of training options to see how we can help.
6. Review your current software and admin processes. Are they manual? Will you be compliant? Will you have the time?
5 Key Points to Note:
➢ If you are a UK employer, auto enrolment will affect you;
➢ You will need to ‘enrol’ certain employees into a pension scheme;
➢ This will start from your staging date although you can postpone if necessary;
➢ You must communicate the changes to your employees that have been affected.