Auto – Enrolment (Pensions) – you can run but you cannot hide!
With our next client now having had their staging date on the 1st of this month, I thought this was a good time to share our experience of auto enrolment so far.
If you are reading this and do not know what auto-enrolment is, then you definitely need to keep reading whether you are an employer or employee. Very basically, by the end of 2017 all employers will be legally required to enroll certain staff in to a pension AND make contributions to that pension. As you can imagine for many businesses this is a huge change and financial addition that needs to be planned for.
So…what is a staging date I hear you cry? It is the date, determined by the Pensions Regulator, which a business has to comply by. Our client this month had the date of 1st March as they employ over 50 staff. You have no control over this and other than an option to postpone for 3 months, you have to do it. Also the regulator will know if you haven’t and can levy some hefty fines – hence you cannot hide.
The main lesson we can share with you is that it takes a lot of planning so do not leave it too late. The Regulator recommends 12 to 18 months and we would agree with this. All our subscription clients have had a personalised timeline for their obligations so they can work towards them. What takes all the time you ask? Here is a very basic list of what is involved:
- Make sure it is in your budget
- Chose a pension provider
- Make sure that your payroll systems can run the reports needed and communicate with the pension provider
- Staff briefings and communication
- LEGAL requirement to write to all staff
- Change your recruitment paperwork to reflect the pension changes
- Change employment contracts (for new starters) in relation to the changes
- ACTUALLY DO IT once staging date arrives
- Complete compliance declaration with regulator
- Maintain records
- Fulfill your ongoing responsibilities which includes a gradual increase in contributions
If all this seems very daunting, it certainly does for most people, then the Pensions Regulator website is very helpful and actually quite user friendly www.tpr.gov.uk and of course you can always guive us a call on 01536 215240