Wed 08 / 07 / 15
What you need to know about pension auto-enrolment
In 2012 the Government made it mandatory for all employers to enrol their employees onto a qualifying pension scheme. All staff working in the UK over the age of 22 to State Pension Age and earning over £10,000 (2014/15) must be automatically enrolled in a pension scheme.
So why has this been introduced? The reason is that without changes to workplace pensions, the UK faces certain pensioner poverty. It is estimated that 7 million people do not save sufficiently for their retirement - in 2013 alone only 35% of the working population were in an occupational pension scheme. The Government has been pressured to provide assistance and auto-enrolment is the answer as it ensures all employees are entered into a compulsory pension contribution scheme.
For businesses of all sizes, auto-enrolment is mandatory whether you have 100 or 1 employees. The Government has put in place staging dates, providing employers with a deadline by which they must have a pension scheme in place by.. Staging dates are based on the number of employees you had on your payroll on 1st April 2012 - you can check your staging date here.
If you fail to put in place a pension contribution scheme by your staging date you will face serious fines which could threaten the future of small to medium sized companies.
It is also important to remember that employers must send a formal communication to all staff telling them how they’ve been affected. Staff communication is a mandatory aspect of auto-enrolment and failing on this point results in non-compliance.
Implementation has already started with the largest employers in October 2012 and continues to 2017 until all employers with a PAYE scheme are automatically enrolled. Staff that do not meet the criteria of earning over £10,000 and being over the age of 22 have the option to join, but it is not compulsory.
For any new starters who joined a company since April 2012, the staging dates are 2017-18.
Auto-enrolment means a huge shake-up for retirement saving, but the good news is that it doesn’t have to be an arduous process for businesses to set up and remain compliant. Companies that have good processes, effective methods of staff communication and expert advisors to hand are more than half way there.
Members North Laine Financial Management have launched a new service, UK Auto Enrolment Ltd. They are based in Brighton and are currently helping many Sussex companies comply with auto-enrolment regulations. The team project manage the entire auto-enrolment process for you, ensuring you are set up ahead of your staging date - saving you time and resources. They offer a free meeting explaining the auto-enrolment process and how you can comply in the most cost-effective way.
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