Too many people are still unaware of the new Auto Enrolment pension regulations and how they will be affected, whether they consider themselves an employer or not!

 

 

However, if you employ one person, in your business or at home, you will probably fall into the new regulations!  It will even affect two directors of a business, if they have employment contracts.

For those of you with a lust for more details, here is a link to the Pensions Regulator, however, for those who need to know the basics, read on.

What Is Auto Enrolment?

The law on workplace pensions has changed. Every employer with at least one member of staff now has new duties, including enrolling those who are eligible into a workplace pension scheme and contributing towards it. This is called automatic enrolment.

It is called automatic enrolment because it is automatic for your staff – they don't have to do anything to be enrolled into your pension scheme, but it is not automatic for you. You need to take steps to make sure your eligible staff are enrolled into a pension scheme. Even if you already pay contributions into a pension scheme for your staff, you still need to check if it is suitable for automatic enrolment.

Who will be enrolled into a workplace pension?

Employers will automatically enrol workers into a workplace pension who:

  • are not already in a qualifying pension scheme
  • are aged 22 or over
  • are under State Pension age
  • earn more than £10,000 a year (this figure is reviewed everyyear), and work or usually work in the UK.

When do you need to give the pension?

Employers (note that word, it is not businesses!) with 49 employees or less will have to start enrolling staff from today, 1st June 2015, however, smaller or new employers have until 2017 to conform.

How do I find out my deadline date?

The date that you have to be up and running is called the Staging Date.  To find out your staging date, get your employers PAYE reference and enter it here.

How long will this take?

There are over 80 steps to getting your AE scheme running, but, thankfully, some of you may be able to skip a few.  At the moment, it can take several months to get a scheme set up and there are more companies offering assistance, which could bring setup costs down, however, over the coming 2 years, there will be 1.3 million companies trying to get this done.  This will create a demand that I can only see in being a sellers market i.e. high pricing (I hope that I am wrong).

Also remember, the later you leave this, the more will want it done and will probably have to pay a premium.

What should I do?

The very first thing to do is make sure that you are being compliant as an employer.  The potential benefit to employees, especially in the longer term, will mean that if you are not compliant, deliberately or accidentally, you have more chance of being reported, with the obvious actions from various authorities!

Then, check your staging date, as above, which will allow you to plan when things need doing.

You can now start looking for providers, but be careful, as you should really go with an independant organisation, who will offer you a number of pension scheme options (this is a separate subject, but some of the better promoted schemes are not as good for staff as others).  Here is one, but there are other!

Bottom line

If you employ one person, personally or in your business, this affects you.  This is compulsary - do nothing and you will end up being fined

 

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