Thought I'd write a bit about auto-enrolment (AE). Going to try and keep it short but the main message is: DON'T LEAVE IT TO THE LAST MINUTE!!!
The general advice is to start thinking about this 12 months before it needs to be in place. The are various tasks that need to be completed in order and can each involve a lot of waiting around. This means it can take 6 to 8 months to go through the steps below.
There are companies that will get you set-up but they are expensive with fees ramping up the closer you get to your implementation date. It's not unheard of for these companies to refuse to take on jobs that are too close to the deadline or at best making it clear that fines are going to be issued!
What is it anyway?
To "encourage" people to save for their retirement the government has introduced Auto-Enrolement.
This makes it a legal requirement for employers to offer a contributory pension scheme.
There are fines for non-compliance, which start at a £400 "wake-up call" and scale up!
Automatic enrolment doesn't apply when a company or individual are not considered an employer.
If you think this is you it might be worth getting in touch.
Here's a link to notify the Pensions' Regulator.
What needs to be done?
1 - KNOW YOUR STAGING DATE
This is when you need to have implemented. It's based on PAYE number and size of organisation.
Here's a tool to find out yours if you haven't yet been notified.
2 - DECIDE YOUR CONTRIBUTION RATES
For an AE pension both the employer and employee need to contribute to the pension scheme. The employee can opt out (but not the employer).
There are three minimum levels which are set to rise as AE rolls out. These depend on the category of employee. Clearly this is going to have an impact on your business.
3 - FIND A PENSION SCHEME
You need to offer an appropriate pension scheme. Unfortunately if you have an existing pension scheme it might not be eligiable for AE.
4 - ASSESS AND ENROLLING YOUR WORKFORCE
There are different classes of employee as far as AE is concerned. This will effect what needs to be done on an individual level.
You'll then need to contact your staff and get them enrolled on the pension scheme if appropriate.
5 - NOTIFY THE PENSION REGULATOR
Within 5 months after your staging date you'll need to submit a statement of compliance to the Pension Regulator.
This is to confim that your Auto-Enrolment system is fully compliant and in action"
So that's it then....
Not quite, you have to maintain appropriate records, ensure pension contributions are made, ensure you remain compliance as your workforce changes and keep up to date with any changes in legislation.
Every 3 years you'll need to "re-enrol" which basically means checking your organisation is still compliant, checking that no opted out employees wish to enrol and then submitting a declaration of compliance to the regulator.
This is a quick guide to give an idea of what is involved and is greatly simplified. As ever the devil's in the detail and it's important to get things right for your specific circumstances.
We aim to get things as accurate as possible at the time of writing but legislation can change!
If you have any questions or could do with a bit of guidance dont hesitate to get in touch