Pension auto enrolment – don’t leave it too late!

You may have noticed that there has been increased coverage in the press recently regarding work place pensions. This is due to new legislation which means that every employer must automatically enrol workers into a workplace pension scheme if the employee:

•  is aged between 22 and State Pension age and
•  earns more than £10,000 a year and
•  works in the UK

Please note that if an individual is a director for a company and has no other employees they will not be covered by the new legislation.

Employers’ obligations

The new legislation is being phased in over a number of years with the largest employers having to comply first. All employers will be allocated a staging date and you will need to ensure that you have a qualifying pension scheme in place by this date. Even if you already have a pension scheme in place, it may not be accepted as a qualifying scheme under the new regime – your pension provider will be able to confirm this with you.

Once a pension scheme is in place, employers will need to enrol qualifying employees into the scheme, ensure the correct premiums are being deducted and paid into the scheme and manage requests from employees to opt in/out of the scheme.

Employers recognise that the administration burden on them is likely to be onerous with fines being levied if it is not done correctly. In view of this, a large number of employers are turning to pension companies and brokers for help and so even if your staging date is a little while away, we would recommend that you get organised sooner rather than later as many pension providers and advisers are likely to reach client capacity.

What to do now?

There is a full range of pension products available for employers ranging from the Government’s own NEST scheme to more sophisticated schemes run and managed by pension companies and brokers. The pension regulator provides some useful information for employers regarding staging dates, planning tools, scheme options, timelines and eligibility etc.

Our payroll department works closely with pension providers which will help ensure that our payroll clients are fully supported during the implementation of the new legislation and that they are fully compliant moving forward.

If you would like any information about our payroll services or the pension providers please contact Helen Sewell who will be happy to advise you.