A quick overview of auto-enrolment and workplace pensions
The law on workplace pensions has changed. Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it. This is called 'automatic enrolment'.
Whether you’re a builder, an architect or employ a personal care assistant, if you employ at least one person you are an employer and you have certain legal duties.
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1. First things first: find out your staging date
Your auto-enrolment staging date is set in law as of 1 April 2012 and is the date your automatic enrolment duties come into effect for you. You must be prepared for this date. You'll need your PAYE Reference to find out your staging date.
The PAYE Reference can be found on letters you have received from The Pensions Regulator about automatic enrolment.
Alternatively, use the link below to visit The Pensions Regulators website:
A qualifying scheme is a scheme which meets the qualifying criteria and the minimum requirements set out by The Pensions Regulator.
For a UK pension scheme to be qualifying it must:
Be an occupational or personal pension scheme
Be tax registered
Meet The Pension Regulator’s minimum requirements
To find out if your scheme is qualifying, The Pensions Regulator has published a guidance document, which can be viewed here.
3. You must make pension contributions
By your staging date, you will have to put your qualifying employees into the qualifying pension scheme. From this date you’ll need to pay money into the pensions scheme, which is known as ‘making contributions’.
The table opposite shows the percentage you MUST pay for each eligible employee.
4. Communicating to your employees
You’ve got your staging date and you’ve set up your qualifying pension scheme. Now you need to tell all your employees about what’s happening, why and how much they’ll need to contribute.
The Pensions Regulator has some useful guidance notes on ‘talking to your employees about pensions’, just remember; everyone is different. Some qualify and some won’t, so make sure you communicate the right message to the right people. Oh, and you must keep records for a minimum of six years.
5. Staying compliant
Auto-enrolment has brought around 30 new employer responsibilities and many of these have to be actioned every pay reference period (every time you pay your employees). As an employer, you are responsible for the delivery of auto-enrolment and if it goes wrong, you will be accountable for putting it right - including the cost of doing so.
Every pay reference period you must:
Assess your work force
Manage opt-ins and opt-outs
Communicate to any new members
Keep an audit trail
Get your free checklist of everything you need to do before, at and after your staging date
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