The UK Government is keen for most workers to have the opportunity to contribute to saving for a pension. As a result, new legislation has been introduced stating every employer employing at least one employee must have a workplace pension scheme in place. “Auto-enrolment” is a quick way of describing the new duties on Employers to enrol their employees into a pension scheme as and where applicable.
A workplace pension scheme comes into force on the start date of the Employer’s first employee. Not all employees will be eligible for auto-enrolment: pension contributions are earnings related and only become payable if assessed earnings fall into a particular category.
What does Auto-enrolment mean to an Employer?
The Pensions Regulator (TPR) is the public body that protects workplace pensions in the UK. The TPR will communicate with Employers to:
- Advise when your legal duties as an Employer are due to start
- Impose fixed penalties along with further daily interest if you do not comply with your duties as an Employer in setting up and offering a pension scheme to eligible employees.
- Advise when re-assessment period is due (after 3 years of the initial setup of pension scheme).
What you need to do to for Auto-enrolment:
- Choose a pension provider and set up a pension scheme
- Decide how to manage your pension scheme
- Assess your employees periodically to see who needs to be auto-enrolled
- Inform your PA’s about:
- The scheme you have chosen
- How much they will have to pay into the scheme
- How much you as the employer will pay into the scheme
- Their rights to opt in or out of the scheme
You will also have ongoing responsibilities to:
- forward all contributions (employer & employee) to the pension provider within a set timescale
- keep records of:
- payments sent to pension provider;
- requests from workers to opt out of scheme;
- check every payday to see if any workers now qualify for auto-enrolment (eg reached aged 22);
- auto enrol your PAs again every 3 years on the anniversary of your staging date or every 18 months if you as the employer choose to pay higher contributions.
If you use LCIL’s payroll service, we will help you with all this.
In the meantime, if you receive any correspondence from The Pensions Regulator please keep it safe, and send in a copy to the payroll team so we can support you to comply with this new legislation – email email@example.com