9 February 2014 by Crystal HR & Payroll Ltd
Workplace pensions law has changed. You must now automatically enrol certain UK workers into a qualifying workplace pension scheme and make contributions towards it.
What should you do now?
To guide you through getting to grips with automatic enrolment, we’ve got all the information you need.
You don’t need to worry, we’ll help you get your company, pension and employees ready so that your transition to automatic enrolment is as smooth and pain free as possible.
Understanding your employer duties
If you have employees who work in the UK, are aged between 16 and 74 and who pay tax and NI then you have new duties as an employer.
Assess your workforce
You need to assess your workforce to check who can be automatically enrolled and who can choose to join a pension scheme. To assess your employees you must check:
- The employee’s age.
- Whether they are a UK worker.
- How much the employee earns.
Once you know what category your employees are, you can communicate the changes to them and set up the relevant pension schemes, read more
Setting up pension schemes
The pension schemes you’ll use for automatic enrolment must meet certain criteria to qualify. To ensure your pension scheme is acceptable for automatic enrolment or to find a valid scheme, you should speak to your pension provider. Read more >>
Once you have a pension scheme, if you haven’t already done so, you’ll need to set this up in your payroll software.
Communicate to your employees
As part of automatic enrolment you must provide each employee with information about their rights and that is applicable to them, at the right time. Read more >>
Register with The Pensions Regulator
Within four months of your staging date you must register with TPR . This registration tells TPR how you’ve complied with your automatic enrolment duties and must be done on time to avoid a fine. All employers must register with TPR, even if they’ve no employer duties for their employees.
Note: Due to a change in legislation, employers staging on or after 1 January 2014 have an extended period to register.
- If your staging date is 1 January 2014, you must register by 2 June 2014.
- If your staging date is 1 February 2014, you must register by 30 June 2014.
- If your staging date is on or after 1 April 2014, you have five calendar months to complete registration.
Complete On-going Assessment
Automatic enrolment isn’t a one-off process, you must continue to assess your workforce each pay period as employee circumstance may change. As you do this, you must ensure that any employees that become eligible jobholders are automatically enrolled and are kept informed of this change.
To comply with automatic enrolment you have to keep accurate records of what you’ve done. The records can be electronic or paper and most must be kept for up to six years.
There are two main types of records that you have to keep:
- Information about employees – For example, name, national insurance number, opt-in notice requests.
- Information about the pension scheme – For example, pension scheme reference, scheme name and address.
Paying Pension Contributions
For all employees who have opted in to a pension scheme, the employer must also make a contribution of at least the minimum defined amount. The amounts that the employer must contribute are to increase over time in a process called phasing.
It’s important that you pay the employee and employer contributions to the pension provider by the date that they’ve specified.