Auto Enrolment – Ensuring Compliance
As you may be aware the Pensions Act 2008 introduced major reforms to workplace pensions. This could affect yourself and your business. The decision to put the reforms plans into effect commenced in October 2012 and this will continue indefinitely.
The most important changes under these reforms are:
All employers in the UK must offer a qualifying workplace pension to their workers.
All eligible workers must be automatically enrolled into the chosen scheme, even if they decide to opt out at a later date.
The employer has to pay a minimum level of contribution in respect of their workers. There is a tiered system of contributions starting at 1% and then stepped until it reaches 3% employer contribution.
The Pensions Regulator will not throw this on you all at once, usually they will give you notice in writing about 12 months in advance of your staging date i.e. the date by which your new scheme needs to be in place.
We recommend that you find out your staging date in advance of this so that you can be aware of what you need to do in order to comply with the legislation.
If you are unsure on the date, you can check you’re staging date on the pension’s regulator website if you have your employer PAYE reference. We can also check it for you should you wish us to do so.
Although the requirements above may seem straight forward, the ongoing compliance regulations can be onerous. The regulator can impose heavy fines on employers that do not comply. We strongly suggest that you need to start planning at least 12 months ahead of your staging date to ensure that you comply with the requirements. With very high numbers of business already planning to stage throughout 2016 / 2017 this will and has put high demand on all advisers and providers. You therefore want to ensure you have it planned in plenty of time so that you are not left high and dry at the last minute.
We suggest that you look to setting up your pension scheme as soon as possible so that you have it ready and in place. You could event start the scheme early if you so wished and use as a staff incentive.
If you have any queries or require further information please feel free to contact us through email or telephone.
Telephone: 01925 551833