Here are some top tips, for employers getting ready to start auto enrolment and to those that have already started.
Do not underestimate what is involved
Allow yourself time to plan and do not leave it to a last minute panic. The providers who are geared up to help will, of course, work best if they can prepare their resourcing requirements and as a result the cost of support tends to increase as employers approach their staging dates.
Do not get complacent
The Pensions Regulator has been given the task of ensuring compliance with the legislation. There are a number of ways in which it can enforce compliance and recent evidence points to businesses being issued with fines. An employer with between 5-49 employees could be faced with a daily fine of £500 for consistent non-compliance and this is significantly higher for larger employers.
Be sure of your deadlines
There are a few deadlines you need to know. These include:
- Staging date – The date at which you must have a suitable scheme in place.
- Declaration of compliance – The date for reporting your compliance to the regulator, which, if you miss it, triggers automatic enforcement actions.
- Deadlines for sending out communications, paying contributions, agreeing acceptable opt-out periods, and so on.
Get your payroll personnel involved ASAP
Do not make the mistake of thinking this is simply about setting up a pension scheme and putting your staff into it. In reality, this is about setting up an ongoing payroll process that will need to know when it must deduct contributions from staff and importantly, when it must not.
Know who your workers are
It may seem obvious but this causes a lot of issues for employers, and will be more prevalent in many smaller businesses due to the nature of their workforces. The individuals you believe are self-employed or employed by someone else quite possibly are not.
Understand the different categories of worker
As an employer you do not have the legal right to automatically enrol all staff. In fact there are four categories of worker:
- Eligible jobholders – those who meet the age and earnings criteria and must be automatically enrolled and also receive a minimum level of contributions;
- Non-eligible jobholders – those who do not meet the age and earnings criteria but can choose to opt-in to a pension and must receive a minimum level of contributions;
- Entitled workers – those who do not meet the age and earnings criteria to be auto-enrolled or to receive employer contributions if they choose to join;
- Anyone who does not fall under your duties – for example, those who are not considered to be working age or who are not considered to be ordinarily working in the UK.
Get good help
You do not have to go it alone as getting expert advice can help save you time and effort.
Know your limits
There are parts of the process it is better to leave to the experts:
- Advice in relation to specific individuals and whether they qualify as workers;
- Support in understanding which elements of pay should be included as pensionable salary;
- Support in understanding how to certify your pension scheme and what contribution structures are acceptable;
- Choosing the most appropriate pension scheme.
With the right level of forward planning auto enrolment can be straightforward. Ask for help when you need it and give yourself enough time to get it right.
If you would like further information or advice on Auto Enrolment, please call us.
Further information can be found at Employers | The Pensions Regulator
Info from CCH Daily