Pensions Automatic Enrolment and ongoing duties – what you need to know 

Every employer has automatic enrolment duties. Automatic enrolment refers to the requirement by The Pension Regulator where UK employers are legally obliged to automatically enrol all eligible workers into a qualifying pension scheme by a specific deadline. This specific date is called the staging date.

Where Automatic Enrolment applies, you must by law set up a qualifying pension scheme, assess your staff, put them into a workplace pension scheme if they meet certain criteria, write to them to tell them what they have done, and complete and submit a declaration of compliance with the Pensions Regulator. You must also create and maintain detailed records of correspondence with workers, workforce assessments, joiners and leavers and pension payments.

According to The Pension Regulator, to date, more than 8 million people have been automatically enrolled in a workplace pension by more than 600,000 employers. However, there are thousands more employers due to reach their duties start date by February 2018, the number of people automatically enrolled will continue to rise. Is your business one of them?

The financial penalties for breach can be severe. The Pension Regulator issues fixed penalty notices of £400 for non-compliance and in addition levying an escalating daily penalty of between £50 {for employers with between 1- 4 staff} to £10,000 {for employers with more than 500 staff}.

To be compliant, all employers will need to review any existing pension arrangements or to design a new scheme that will suit the automatic enrolment criteria.

We can make life much easier for you with our automatic enrolment solution. As part of our automatic enrolment service we will review your position and advise you, to help ensure you are complying with this onerous legislation and minimise your exposure to penalties.

What if you have already completed your declaration of compliance?

An employer’s workplace pension duties do not stop with declaring compliance. You have several duties including making regular contributions into their chosen pension, monitor the age and earnings of their staff and enrol eligible staff, process any requests to join or leave the scheme, and keep and maintain accurate records. You will also need to re-enrol eligible staff into an automatic enrolment pension scheme every three years.

Furthermore contributions are being increased gradually over time. From 6 April 2018, the minimum amount employers have to pay in will be 2% of their staff’s pay, and the minimum amount your staff put in will rise to 3%. This will increase again on 6 April 2019 to 3% from employers and 5% from staff. The current minimum contribution levels are 1% from employers and 1% from staff and these rates will remain valid up to 5 April 2018.

The Pension Regulator conducts stop checks on employers across the country to make sure they are complying with their duties, it is important you are aware what your business has these checks inbuilt into your processes on an ongoing basis to ensure you comply with the law.

Our payroll service is designed to ensure employers are meeting their ongoing duties by assessing, enrolling and re- enrolling staff as necessary.

What if you are a new employer?

If you became an employer October 2016 and June 2017 your staging date will be 01 January 2018. If you become an employer between July 2017 and September 2017, your staging date will be 01 February 2018.

For further information about Auto Enrolment visit The Pension Regulators website and more specifically the pages about ongoing duties for employers.

If you would like help knowing your staging date or meeting your Auto enrolment duties, then get in touch and we will be happy to assist. If you are one of the many employers who have successfully completed their Auto Enrolment duties, then feel free to share this article with others in your network.

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