AUTO-ENROLMENT FOR EMPLOYERS
WHAT ARE YOUR DUTIES?
The Pensions Regulator has published over 250 pages of notes to help employers comply with their new responsibilities, which in essesnce breaks down into 33 new pension responsibilities for each employer!
To make life a little easier, I have broken them down into five main areas – here is an overview of your main duties:
- Categorise your workers. You may think everyone should be included in auto-enrolment, but it is not that simple.
- Communication. There are a number of different communications you need to send to different categories of worker at different points in time.
- Keep detailed employee records. Employees can opt out, employees who are not eligible now, may become eligible, opted out employees may change their mind – there are a number of scenarios which you must take into account. Detailed records relating to all this movement must be maintained and updated at all times.
- Manage your payroll. Your payroll system will need to ensure the correct contributions are payable for each employee every time the payroll is run.
- Choose a pension plan. You are also expected to select a pension plan and take decisions about which investment choices to offer your employees – decisions that are usually only taken by pension professionals with many years' experience.
There has been lots of discussion regarding how auto-enrolment will affect employees and debate around whether employers are ready. The truth of the matter is this; there are significant costs and time pressures facing businesses in rising to the challenge of implementing auto-enrolment, and with fines for non-compliance, businesses will also pay the price for getting it wrong.
For businesses that haven't yet staged, auto-enrolment is fast approaching - it is no longer that bridge in the distance. This is something you have to deal with now but with the right help and support, it does not have to be a big obstacle to cross.
WHEN DO EMPLOYERS NEED TO ACT?
Each business will have a different staging date. This is the date set by the Pensions Regulator for auto-enrolment implementation for each band of employers across the UK. All eligible employees must be auto-enrolled on this date (or from an earlier voluntary date if approved by the Pensions Regulator, or from a later Deferral Date if you are using Postponement).
| Number of Employees|| Staging Date|
| 2,000 - 2,999|| August 2013|
|1,250 - 1,999|| September 2013 |
| 800 - 1,249|| October 2013|
| 500 - 799|| November 2013|
| 350 - 499||January 2014|
| 250 - 349||February 2014|
| 160 - 249||April 2014|
| 90 - 159||May 2014|
| 62 - 89||July 2014|
|59|| November 2014|
| 54 - 57||March 2015|
| 50 - 53||April 2015|
| 40 - 49||August 2015|
| 30 - 39|| October 2015|
| Fewer than 30|| From June 2016|
WHAT TO DO NEXT?
The implications of auto-enrolment are huge for any business, no matter how big or small. There will be lots of issues to deal with – from employee engagement, through to setting up a pension scheme and deducting contributions from your payrollsystem for each employee, each and every month.
As an experienced financial adviser, I can support you every step of the way