As you may be aware, new pension legislation has been introduced which means that you must offer a pension to your employees. This will affect all employers,
even those who currently offer a pension to their employees, so make sure you know what is expected of you to avoid penalties.
1. Put your staging date in your diary!
Each employer is allocated a date (called a staging date) by which your pension must be in place. Failure to do so may lead to penalties so it is important that you know your date and have put plans in place in plenty of time. The staging date will be sent to you in a letter from the Pensions Regulator or you can go online here.
2. Decide whether you will outsource to a company that provides auto enrolment services or do all of the work yourself.
You may decide to outsource the hard work to a company like Critchleys HR and Payroll, who offer auto enrolment services to help you. We can guide you through the process of set up and ensure that you comply with all of your employer duties.
However, as 1.3 million small and micro businesses will be staging before 2018 you need to get organised well before your staging date and select your provider before the rush. It is believed that demand for help and advice will exceed the supply of payroll and pension staff available in 2016/17 across the UK. You can set up your auto enrolment pension scheme well before your staging date without paying in any contributions, so we’d urge our clients to get involved to avoid last minute panics.
3. Chose a pension provider and decide on the design of your pension scheme
Critchleys HR and Payroll is not regulated by the Financial Conduct Authority and so we cannot advise you on the suitability or otherwise of a pension scheme. However, in our experience of auto enrolling companies with fewer than 50 employees, the choice of pension provider is limited unless substantial pension contributions are being made.
We work in particular with the three Master Trusts; The People’s Pension, NOW: Pensions and NEST to provide a seamless service through online portals with these pension providers. We can also run your auto enrolment for you if you have chosen one of the major pension providers such as Aviva, Friends Life, Royal London, Scottish Widows and Standard Life.
So although we can’t provide advice on which pension is best for you, under our auto enrolment services package, we can help you to understand the decisions you need to make about the pension you offer and the financial impact these decisions will have on your business.
We have found that clients who go directly to a pension provider are being charged more for the set up than our auto enrolment services package, so it may be worthwhile asking what we can do for you first.
4. Assess your staff to find out who needs to be enrolled
Employers are required to assess their workforce to decide who should be automatically enrolled. Our auto enrolment services will carry out this assessment and let you know who is an eligible jobholder, non-eligible jobholder or entitled worker, to save you the time and effort involved in analysing your employees by age and earnings.
5. Communicate with your staff about the pension scheme
Depending on the pension provider chosen, you may need to write letters to all of your staff to tell them about their statutory rights and entitlements. This is something we do for under our auto enrolment services, as there are rules about the wording and timing of these communications.
6. Declare your compliance to the Pensions Regulator
You have 5 months after your staging date to inform the Pensions Regulator about how you’ve complied with your employer duties. If you don’t do it in time you could be fined. Of course, this is all part of the package under our auto enrolment services as we want to protect our clients from unnecessary penalties.
7. Deal with the ongoing administration of auto enrolment
Having set up your auto enrolment pension you may think that you can relax and forget about pensions for a while. Unfortunately, there is quite a bit of administration that needs to take place each month (or week, if you pay weekly). Employers who use our auto enrolment services remove the worry and burden of doing this as we handle monthly opt-ins, opt-outs and contribution refunds. We liaise with your pension provider as part of our payroll service to ensure that the correct amount is deducted each month.
More information on our Auto enrolment services can be downloaded here. Alternatively, we are running complimentary seminars every month so that we can give you a more in-depth understanding of your duties and answer your specific questions. Find out more by clicking here.