There are some things we would all quite happily miss: cleaning the bathroom, bad traffic, or time recording. However when it comes to Pension Automatic Enrolment that’s not something any employer wants to miss.
The Pensions Act 2008 changed the law on work placed pensions. All employers in the UK are now required to have a pension scheme in place for certain staff and contribute towards it. This is known by most people as “Automatic Enrolment” to some as “AE” and to those very lucky people, like myself, who have an incredibly witty line manager you may even be dubbed the office “AE Geek” -whether you like it or not!
Penalties for Non-Compliance
Now for the scary part! Employers who fail to comply with their Pension Automatic Enrolment duties may face large fines or even imprisonment. Don’t just take my word for it- a quick online search will provide adequate evidence of companies fined by The Pensions Regulator for non-compliance.
One English Football club was fined over £20,000 for repeated non-compliance. Unusually, I imagine, this was a penalty the club would have preferred not to have been awarded!
Eligibility- A Quick Summary
All employers in the UK are responsible for assessing the eligibility of their own work force. All employers in the UK must enrol their staff into a work place pension and make contributions if their staff are:
- Working in the UK
- Aged between 22 and state pension age
- Earn at least £10,000
Full details on eligibility can be found under the “Work Place Pensions” section of the Government’s website. (Link below)
Where to start-Your Staging Date
First comes the Automatic Enrolment “Staging date” less theatrical and exciting than it sounds but none the less an important date for the diary. The Staging Date is the date in which your Automatic Enrolment duties come into force. You should receive confirmation from The Pensions Regulator of your Staging Date but if not you should contact The Pensions Regulator for clarity or you can check by using the Staging Date Calculator. (Link below)
Staging Date Calculator: https://www.thepensionsregulator.gov.uk/employers/staging-date.aspx
The next steps
Once you are clear on your Staging Date there are further issues to consider:
- You may wish to postpone your Staging Date for up to 3 months.
- Link: https://www.thepensionsregulator.gov.uk/postponement.aspx
- You will require to select a Pension Provider and Pension Scheme. We advise independent financial advice is sought in relation to Pension Provider selection.
- You will require to set your Pension Scheme up and start providing monthly data to your Pension Provider. We regularly assist clients with this part of the process.
- Once your Pension scheme is up and running you will require to continue to ensure your employer’s duties are being fulfilled. Full details on employer’s duties can be found on The Pensions Regulator website. We strongly advise familiarising yourself with the required duties. Link: https://www.thepensionsregulator.gov.uk/en/employers
Setting up your Pension Scheme and the provision of monthly data to your Pension Provider
At The Cashroom we regularly assist clients with the set-up of their work place pensions and with the provision of monthly data to their selected Pension Providers. We ask all clients to seek independent financial advice in relation to Pension Provider selection. Once a client has selected a Pension Provider we can assist by working closely with the Pension Provider and any other third party involved to ensure a smooth set up and effective monthly data transfer thereafter. (We also require to carry out the Payroll work for any client wishing to instruct our Pension Automatic Enrolment Service).
We have teamed up with Armstrong Watson who can give you independent advice in relation to a Pension Provider and who have compiled a FAQ document to give you more detail. Please email firstname.lastname@example.org and you will be sent your own copy of this FAQ document.
For more information on how we can help please do not hesitate to email Gregor.Angus@TheCashroom.co.uk.
An essential guide to Automatic Enrolment Link: https://www.thepensionsregulator.gov.uk/docs/the-essential-guide-for-automatic-enrolment.pdf
Detailed Guidance note for Employers Link: https://www.thepensionsregulator.gov.uk/docs/detailed-guidance-2.pdf
Full details on Automatic Re-enrolment, employer’s duties and timescales can be accessed on the Pensions Regulator’s website. Link: https://www.thepensionsregulator.gov.uk/re-enrolment.aspx
Full details on Compliance and Enforcement policy Link: https://www.thepensionsregulator.gov.uk/docs/pensions-reform-compliance-and-enforcement-policy.pdf
Don’t forget to email email@example.com for a copy of the FAQ document!
Senior Business Development Associate at The Cashroom Ltd
For more information on how The Cashroom can help you and your business please do not hesitate to email, if you are SRA regulated contact Alex.Holt@TheCashroom.co.uk or Law Society of Scotland regulated then Gregor.Angus@TheCashroom.co.uk.