Q. What is automatic enrolment and why is it happening?
A. The law on workplace pensions has changed and now, if you employ staff, you will need to put a “Workplace Pension” in place to comply with the regulations. This requirement has applied to larger employers since October 2012 and by 2018 will apply to all employers.
Automatic enrolment means that, rather than having to actively choose to join a pension scheme, staff are put into one by their employer as a matter of course. If they don’t want to be in the pension scheme, they must actively choose to opt out.
The scheme has been designed to encourage people to build up retirement savings.
Q. Has this got anything to do with me?
A. If you are an employer in the UK, yes, the scheme will affect you.
The scheme is compulsory and staff who are:
· aged 22 to state pension age
· working in the UK
· earning over £10,000 a year
will be automatically enrolled into a scheme.
Some staff who don’t meet the criteria above are able to opt in to the pension scheme you’re using for automatic enrolment. You must put them in if they ask.
Q. I am a director only company…do I have any responsibilities.
A. If you don’t have any staff other than directors, you may not have any automatic enrolment duties.
Automatic enrolment will apply if more than one director has an employment contract. In that case, the company will owe auto-enrolment duties to those directors who have employment contracts.
If you think that you don’t have any auto enrolment responsibilities you will still need to inform the Pensions Regulator.
You can do this via the following link: https://automation.thepensionsregulator.gov.uk/notanemployer or we can do this on your behalf for nominal charge of £10 (+VAT)
Q. What is my staging date and how do I find it?
A. Your staging date is the date when your auto enrolment duties come into effect. It is based on the total number of people in your PAYE scheme.
We have put together this short, helpful video about to find your staging date quickly and easily.
Should you still have problems finding your staging please contact us.
Q. What happens if my business does not comply with the scheme?
A. It is important to prepare as early as possible to give yourself enough time to review and update your pension scheme, processes and systems. If you leave it too late and aren’t ready by your staging date The Pensions Regulator may take severe enforcement action.
Penalties can include:
-A flat £400 fine
-Daily fines of between £50 and £10,000
To avoid penalties you must ensure:
-Your scheme is up and running by your staging date
-You remain compliant
-You fix issues quickly.
Q. How much is automatic enrolment going to cost my company?
It is difficult to generalise how much a scheme will cost as each company will have different requirements.
Auto enrolment can include some or all of the following costs:
· Payroll costs (additional processing/interface builds/assessment costs)
· Pension contributions
· Communication costs (managing the opt in/opt out processes)
· Any financial advice you receive.
Q. I’ve missed my staging date, what shall I do?
There are likely to be financial consequences because you have missed your staging date. You should contact us immediately if you believe this to be the case and we can work with you to rectify the situation and minimise possible fines.
Complying with auto enrolment is compulsory for all employers, the sooner you act the better.
If you are unsure of your staging date watch our short video above about how to find it.
We provide a completely bespoke service so will need to find out more about your business and current Payroll cycle before being able to calculate an exact cost. Our friendly team will be happy to discuss this with you further.
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