Are you ready for Auto-Enrolment?
Auto enrolment has been described by many as the biggest revolution in UK pensions for 100 years and with the “low hanging fruit” – those larger blue chip companies already signed up, the focus has firmly switched to around 2 million small and micro employers who are required to set up a scheme between now and 2018.
What is Auto enrolment?
Under law introduced in 2012, all employers must eventually offer a workplace pension scheme and automatically enrol workers in it. This started with larger companies in 2012 but will apply to all employers by 2018.
Why are workplace pensions changing?
Auto-enrolment legislation helps address the pension gap in an ageing population and ensures that all employees are provided for in later years.
When will I need to do something?
Each business has a staging date which is set by the pensions regulator. If you are an employer, The Pensions Regulator should have written to you confirming your staging date but you can easily find it online if you do not have the letter.
Who will be automatically enrolled?
Whether your employees work full time or part time, your duty as an employer is to enrol your employees into a workplace pension scheme if they:
What are the level of contributions?
The total minimum contribution amount is currently set at 2% of your earnings (0.8% from you, 1% from your employer, and 0.2% as tax relief).
In 2017 and 2018, the amounts are set to increase.
The minimum contribution applies to anything you earn over £5,876 (in the tax year 2017-18) up to a limit of £45,000 which includes overtime and bonus payments.
How does the regulator check on individual firms?
It would be impractical to suggest that the regulator has the resources to visit hundreds of thousands of firm to see if they have complied with their legal obligations.
However, they can and do carry out checks remotely through the “Declaration of Compliance” which companies have to complete online through The Pensions Regulator’s website and there are significant penalties for non-compliance.
A declaration of compliance is required even if there are no eligible workers, for example, if all employees are Directors or earn below £10,000.
In its most recent quarterly bulletin, the regulator issued 2,919 fixed penalty notices bringing the total number issued to date to 9,831.
Summary
What – Auto enrolment is the name given to the mandatory, automatic process of signing your staff up for a workplace scheme.
Why – It is happening to ensure that everyone is encouraged to provide for later life during their working career.
When – Each company needs to have a pension scheme in place by a certain date outlined by the government and depending on the size of the company.
Who – Every UK employer and those with staff in the UK are affected.
How – Both the employer and employee make contributions into the scheme.
How we can help
If you have not yet set up an automatic enrolment pension scheme for your business, we can help guide you through the process from an initial assessment, scheme set up, declaration of compliance to the subsequent day to day running of the scheme enabling you to concentrate on growing your business, safe in the knowledge that your business is compliant with the workplace pension legislation.
For more information and a quote, please contact us on 01923 269887.
Auto enrolment has been described by many as the biggest revolution in UK pensions for 100 years and with the “low hanging fruit” – those larger blue chip companies already signed up, the focus has firmly switched to around 2 million small and micro employers who are required to set up a scheme between now and 2018.
What is Auto enrolment?
Under law introduced in 2012, all employers must eventually offer a workplace pension scheme and automatically enrol workers in it. This started with larger companies in 2012 but will apply to all employers by 2018.
Why are workplace pensions changing?
Auto-enrolment legislation helps address the pension gap in an ageing population and ensures that all employees are provided for in later years.
When will I need to do something?
Each business has a staging date which is set by the pensions regulator. If you are an employer, The Pensions Regulator should have written to you confirming your staging date but you can easily find it online if you do not have the letter.
Who will be automatically enrolled?
Whether your employees work full time or part time, your duty as an employer is to enrol your employees into a workplace pension scheme if they:
- Work in the UK
- Are not already in a suitable workplace pension scheme
- Are at least 22 years old but under state retirement age
- Earn £10,000 or more a year
What are the level of contributions?
The total minimum contribution amount is currently set at 2% of your earnings (0.8% from you, 1% from your employer, and 0.2% as tax relief).
In 2017 and 2018, the amounts are set to increase.
The minimum contribution applies to anything you earn over £5,876 (in the tax year 2017-18) up to a limit of £45,000 which includes overtime and bonus payments.
How does the regulator check on individual firms?
It would be impractical to suggest that the regulator has the resources to visit hundreds of thousands of firm to see if they have complied with their legal obligations.
However, they can and do carry out checks remotely through the “Declaration of Compliance” which companies have to complete online through The Pensions Regulator’s website and there are significant penalties for non-compliance.
A declaration of compliance is required even if there are no eligible workers, for example, if all employees are Directors or earn below £10,000.
In its most recent quarterly bulletin, the regulator issued 2,919 fixed penalty notices bringing the total number issued to date to 9,831.
Summary
What – Auto enrolment is the name given to the mandatory, automatic process of signing your staff up for a workplace scheme.
Why – It is happening to ensure that everyone is encouraged to provide for later life during their working career.
When – Each company needs to have a pension scheme in place by a certain date outlined by the government and depending on the size of the company.
Who – Every UK employer and those with staff in the UK are affected.
How – Both the employer and employee make contributions into the scheme.
How we can help
If you have not yet set up an automatic enrolment pension scheme for your business, we can help guide you through the process from an initial assessment, scheme set up, declaration of compliance to the subsequent day to day running of the scheme enabling you to concentrate on growing your business, safe in the knowledge that your business is compliant with the workplace pension legislation.
For more information and a quote, please contact us on 01923 269887.