Auto Enrolment is upon us and employers must comply with Workplace Pension obligations.
Employers are required to set up a qualifying Workplace Pension scheme, enrol all staff who meet certain criteria then contribute towards the scheme.
Fines and penalties may be faced by employers who fail to meet their obligations in time.
Setting up a workplace pension may seem like an alien concept but in reality the process is quite straightforward and can be broken down into easy to manage stages.
This solution is provided by County Financial Advice – Independent Financial Advisers
We understand that many employers will need help and we can provide that help and support. Our staff are highly qualified and the schemes we use are well established.
What you need to do – The Main Steps:
Before going ahead it is important to make sure you need to comply. If you don’t have any employees you might not have to. If in doubt, call us 02380 000 208.
Before your Staging Date
Find out your deadline.
This is your ‘Staging Date’ and you can find this out from The Pension Regulator. You will need to know your PAYE reference – you may need to ask your accountant or payroll provider for this.
Provide a point of contact.
Let The Pension Regulator know who in your organisation is the main contact dealing with your Auto Enrolment responsibilities. you can do this on The Pension Regulator website.
Develop a plan.
Now you know when you need to act you need to find out what you have to do.
Having a check-list to work to will help you plan.
In very basic terms you need to:
- Choose a scheme and set up a Workplace Pension
- Establish which staff you have to Auto Enrol
- Tell your staff what’s happening
- Make contributions to the pension (you and your staff have to contribute)
Find out who to enrol:
You have to automatically enrol every staff member earning more than £833/month between age 22 and Sate Pension Age. Everyone else has a right to opt-in if they wish.
Your Payroll software may be able to help you determine the classifications of employees so you know who to enrol. If in doubt, call us and we can help you.
Choose your software:
This is to do with your Payroll software. If your payroll is in-house you may know if your software can help with Auto Enrolment. You may need to speak with the software provider.
If your payroll is provided by a third party, contact them to confirm their software can perform the required tasks and produce the necessary reports.
Compatible software will simplify the process and most well known software providers now have this feature.
Choose a Pension Scheme:
If you already have a company pension scheme in place you can check with the provider if it qualifies as a compliant scheme for Auto Enrolment purposes.
If you don’t have a scheme in place there are numerous schemes available and depending on your specific requirements one may be slightly more suitable than another. We can highlight the differences and benefits of some of the main options to help you choose the best fit.
It’s important to choose a scheme early in the process because over the coming months they will be very busy enrolling 1000’s of employees.
At & beyond your Staging Date
Automatically enrol your staff:
Having already determined which employees you need to automatically enrol you must add them to the scheme.
You must then write to them informing them how Auto Enrolment affects them. We can help you with template letters.
Any employees not eligible for auto enrolment will have the right to opt-in if they wish.
At this stage you must also start to make contributions to the scheme before another deadline – you will be notified of this by the scheme provider.
Complete Declaration of Compliance:
Completing your Declaration of Compliance informs The Pensions Regulator that you have enrolled your staff members and fulfilled your legal duties.
This must be completed up to 5 months from your Staging Date but we recommend you do it as soon as you are able.
You must continue to make the minimum contributions to the scheme. These start at 1% Employer & 1% Employee (total 2%) and will be increasing gradually until 01/10/2018 up to 3% Employer & 5% Employee (total 8%) so it’s important to know when the contributions increase and by how much.
Checking staff at every pay day will ensure any new employees or employees who become eligible are enrolled without delay.
Some staff members may choose to ‘Opt-out’ and you will have to stop contributions and refund any contributions paid.
Good communications with your Payroll department or provider will be key to ensuring you comply with your obligations and continue to remain complaint
£400 per scheme.
Price per Employee
Up to 20 employees
£100 / employee
Over 20 employees
£75 / employee
2 employees = £400 Scheme Set-Up + £200 (£100 x 2) = £600
5 employees = £400 Scheme Set-Up + £500 (£100 x 5) = £900
20 employees = £400 Scheme Set-Up + £2000 (£100 x 20) = £2400
25 employees = £400 Scheme Set-Up + £2000 (£100 x 20) + £375 (£75 x 5) = £2775