Experienced Advisers to help manage the complexities of Pension Auto-Enrolment
It is now fairly common-knowledge that the government is making it compulsory for employers to put in place a qualifying Workplace Pension Scheme and automatically enrol staff who qualify – hence the title “Pension Automatic Enrolment” or Pension Auto-Enrolment for short. Employers will then have to make a contribution to their staff’s pensions in every pay period, affecting every business in the UK, including yours.
These new automatic enrolment regulations are being enforced by The Pensions Regulator; you mustn’t ignore them. At Octagon Financial Services we know that the prospect of this can be quite daunting, particularly as it is a new measure which no-one has any previous experience of. Understandably, our clients are asking us a lot of questions about Auto Enrolment;
we thought it might help to give you some of the answers here:
What is a Workplace Pension?
This is a way of saving for your retirement that’s arranged by your employer. These are sometimes also called Occupational Pensions, Works Pensions, Company Pensions or Work-Based Pensions.
What are my duties as an employer?
Automatic Enrolment /Auto Enrolment applies to every employer in the UK. Even if you only employ 1 person, this still applies to you and means you have certain legal duties.
You may have received a letter from the Pensions Regulator, letting you know your staging date (i.e. the date you need to be ready by), and the steps you need to follow. These steps can also be found on the Pensions Regulators website http://www.thepensionsregulator.gov.uk. As an Employer you need to make sure all these automatic enrolment steps are completed – it is part of your legal duty.
In simple terms, the steps are:
1. Make sure you know your staging date.
2. Nominate one person in the company to be a consistent point of contact.
3. Assess all your staff to find out who will be eligible to enroll.
4. Choose your software, making sure it is specifically towards Auto Enrolment requirements.
5. Choose a Pension Scheme!
6. At your Staging Date, automatically enroll all eligible staff to your workplace pension.
7. Write to all your staff about how Automatic Enrolment will affect them.
8. Complete your Declaration of Compliance (Registration)which confirms you have fulfilled all your legal duties.
9. As with real time PAYE, you must keep records of your automatic enrolment activities.
10. Make sure you comply with all Auto Enrolment regulations on an ongoing basis.
Once you have worked your way through all these steps you will still need to manage all the following:
- The process of enrolment
- Opt-in/opt-out processes
- Confirmation to The Pensions Regulator
- Records for review in the event of a compliance visit by the Regulator
The Pensions Regulator has recently issued hefty fines (up to £400.00 per day) to medium sized firms that have not completed their Automatic Enrolment duties by their staging date. They have also been taking enforcement action for non-compliance.
All in all, managing the complexities of Automatic Enrolment is no mean feat! Why not consider engaging a highly experienced and capable advisory business to support you, giving you complete peace of mind that every “i” has been dotted and every “t” has been crossed.
Whether you decide to handle Automatic Enrolment yourself, or get help from an experienced Financial Adviser, whatever you do don’t leave it until the last minute as this is likely to make the whole thing more complicated, and more expensive!