You may be familiar with the terms ‘Auto Enrolment’ and ‘Workplace Pension’, but do you know what they actually mean for you? Greg Philp of EnrolPay reveals all.
Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it. This requirement is called ‘Automatic Enrolment’.
How do I comply?
In order to comply there are a number of duties that you must perform, but first (and most important) is to find out your ‘Staging Date’ (which you can do by visiting the Pensions Regulator’s website: www.thepensionsregulator.gov.uk/employers/staging-date.aspx).
The Staging Date is the day on which you’re required to assess your workforce as to their eligibility for auto-enrolment, however you can postpone the date that you start paying contributions by up to a maximum of three months. This is called ‘deferral’ but, although you’re postponing the date that you start paying contributions for your employees, you still need to assess your workforce.
During this period, any or all of your employees can opt-in or join early, at which point you need to pay contributions on their behalf to complement their own contributions to your scheme.
There has been a real drive to raise awareness of the workplace pension and the responsibilities associated with the legislation but, despite this, many employers are still burying their heads in the sand. It really doesn’t matter whether you only employ one person, if that person works only a few hours a week, or if they’re not interested in paying into a pension at this time, there are steps that you MUST take to ensure that you’re compliant.
“EnrolPay currently offers free Small Payroll software for companies with up to nine employees.”
The Pensions Regulator will typically contact you one year before, six months before and three months prior to your Staging Date to remind you that it is coming and that you should be beginning to prepare yourself. By the time you reach your Staging Date you should then have spoken to an independent ﬁnancial advisor to work out which pension is most suitable for you and your workforce. You should also have decided if you’re going to defer staging and by how long, and set up your pension scheme with your chosen provider.
On your Staging Date you need to communicate to your employees what auto-enrolment is, what it means for them and what their options are moving forward. It is imperative that you don’t inﬂuence any decision that they make regarding their pension – particularly regarding opting out of the scheme.
Within ﬁve months of reaching your Staging Date you must sign and complete your Declaration of Compliance, which shows the Pensions Regulator that you’re complying with the regulations and includes details about your workforce.
As complicated as this all sounds, there is help out there, and it doesn’t have to cost you an arm and a leg!
EnrolPay currently offers free Small Payroll software for companies with up to nine employees. Totally integrated with the government’s NEST pension platform, the company offers auto-enrolment functionality for only £4 per month.
As a software specialist, EnrolPay won’t offer financial advice, but its team of experienced payroll and pensions administrators can keep you on track. If you’d prefer to outsource, the company can provide a managed service, allowing you to focus simply on running your own business.