Starting from October 2012 all UK employers will be required by law to make a Qualifying Workplace Pension Scheme available to their employees, and to auto enrol their eligible employees into such a scheme. Failure to do so will results in daily fines of upto £500.
All employers in the UK will need to adhere to the new Auto Enrolment legislation, and make sure they have processes in place to ensure they are compliant. There is no opt-out option for employers.
Each employer will have a specific date between October 2012 and 1st February 2018 in which they must impliment adherance to the new rules. This date is known as your staging date. With almost 1.2 million employers having to impliment these changes within this time period, all pension providers are now suggesting that you need to plan at least 9 months in advance to avoid additional costs and potential fines.
Who do I need to put into a pension scheme?
You must automatically enrol all staff who are:
- aged 22 to state pension age
– working in the UK
– earning over £9,440 a year.
Some staff who don’t meet the criteria above are able to opt in to the pension scheme you’re using for automatic enrolment. You must put them in if they ask. You’ll have to pay a minimum employer contribution for all staff you put into this scheme.
Certain other staff can ask to join a workplace pension scheme. You must put these staff in a scheme, but the rules are different and there’s no requirement for you to pay an employer contribution. It’s the age and earnings of a member of staff that determines what ‘type’ of worker they are and therefore what duties you’ll have for them.
Where do I start?
The first thing you should do is find out your staging date for Auto Enrolment. Once you know when this is, you can start planning to make sure you’re ready in time. The key is to start planning early.
You’ll need to make some changes to allow for automatic enrolment, such as:
- setting up workplace pensions scheme or modifying an existing one
– making any necessary changes to payroll so it can handle the new requirements
– putting systems in place to monitor the ages and earnings of your staff
– writing to your staff.
Heritage Financial Solutions Ltd are experienced with Auto Enrolment Help, implementing cost effective and suitable auto enrolment solutions, we can take alot of the hassle out of setting up a new scheme or checking your existing scheme can be adapted for the new changes. Get in touch today and speak to an experienced Auto Enrolment Adviser to find out how exactly we can help.
One of the greatest challenges of auto enrolment for employers in the integration of payroll and the workplace pensions provider for auto enrolment. Many providers advertise seamless integration between these two important elements, however we have experience of several systems and in most cases this is not true. Heritage can not only find the most suitable and cost effective pension provider, we can ensure with our experienced team that your payroll systems works.
Furthermore, if you don’t currently have a dedicated payroll provider we can help setup a package that’s right for your business. We offer an initial consultation at no cost, so get in touch today.