Auto enrolment into Workplace Pensions
The law on workplace pensions changed recently. This means that now ALL EMPLOYERS are legally required to enrol certain staff automatically into a pension scheme, and both the employee and the employer need to make contributions. It is also the employer’s responsibility to tell the staff about the scheme they enrol them into and allow other employees to join the scheme if they ask to do so. The government body that will be regulating the work-based pension schemes is called The Pensions Regulator or TPR. TPR have already started contacting everyone who runs PAYE (the employers) to let them know when their Staging Date is.
Employers must be ready to start enrolling their staff into a suitable workplace pension from their Staging Date. It is possible to find staging dates from the following website www.tpr.gov.uk/staging-date
Point of Contact
All employers will need to get in touch with TPR to nominate a Director or Owner of the business who will be the main point of contact within the business. That person will then be sent information, help and guidance on auto enrolment at varying stages. They can also nominate a second point of contact, for example their accountant, who will also receive information from TPR. It is possible to nominate contacts at the following website: www.tpr.gov.uk/nominate-contact
Developing your initial plans for a workplace pension
Most employers are finding that they need to start preparing up to 12 months in advance of their staging date. There is a useful planning tool on TPR’s website at: www.tpr.gov.uk/planner
Both employer and employee need to pay regular contributions into the pension and it is up to the employer to automatically enrol all eligible employees into the scheme. If the employee wants to opt out they can, but the employer has to automatically re-enrol them after 3 years. There are lots of factors to consider on how to manage automatic enrolment and that is why many of the owners of small and medium sized businesses are seeking information from their accountants and independent financial advisers. For example many small businesses are ‘one man bands’ with only a sole director, or a small number of directors (none of whom have contracts of employment) , the answers as to whether or not these businesses have to provide a workplace pension and many more similar questions are found at www.tpr.gov.uk .
There are around 33 mandatory pension duties involved and it has been estimated that it will take each employer around 250 hours to understand, digest and implement these new, legal duties.
Results of non-compliance
If you do not fulfil your duties, TPR will be issuing penalty notices and begin to send out fines. The first fine is for £400, payable within a specific period, and persistent failure to comply has a daily rate of between £50 and £10,000, pending on how many staff the employer has.
How can Shaikh & Co help YOU
We are not regulated to give advice on your choice of pension provider, however we have partnered with an Employee Benefit Consultancy who SPECIALISE in automatic enrolment and have developed a low cost solution specifically with the needs of employers staging in 2015 and beyond in mind. This solution means that there are no complicated decisions for you to make. In fact, all you need to do, is pay the pension contributions by direct debit when they become due.
We will ensure that each of the duties you are legally expected to perform, and more, are fulfilled in a timely manner. This service has a fixed fee, so that it is easy for you to budget and gives you the peace of mind that you remain compliant and avoid the onerous admin tasks as well as the costly fines from TPR.
Contact us today and let’s get you started on Auto Enrolment for Workplace Pensions and tick that off your STILL TO DO list!
Telephone 01892 552696 and speak to Gulam Shaikh, or use our Contact Us form here