The cute face of ‘Workie’ the Workplace Pension or Auto Enrolment character is found on the side of buses and on TV quite regularly. But as a small or new employer it’s likely to be something that is causing you a bit of headache.
This week’s blog is about the Workplace Pension, your obligations as a small employer, and how to prepare for auto enrolment.
The Workplace Pension or Auto Enrolment
The Pensions Act of 2008 sets out new requirements for employers. Each employer has to enrol eligible employees in a scheme that is approved by the Pension Regulator. Not all pension companies provide a pension scheme for small and micro employers, and the government has set up NEST which will provide a pension scheme for your company regardless of the number of employees you have. The People’s Pension and NOW are also focused on the micro employer.
The first thing to do is find out your ‘Staging Date’. Your staging date is the date at which your Auto Enrolment duties come into effect for you, however there is work to be done prior to this date. You can find your staging date here and begin to put your plan together. Ensure that you have your PAYE Reference number, as you will need this to check you Staging Date.
It can take between 12 and 18 months of planning and work to get a scheme in place, so starting as early will make it as smooth and stress free as possible.
Simply put, if your employee is aged 22 or above and earns more than £10,000.00 per year, and is not in a workplace pension compliant scheme elsewhere, they must be enrolled.
Both employer and employee are required to contribute to the pension, meaning that there is an increased cost to the employer for each employee. Initially, and up to 5th April 2018 the minimum contribution for the employer is 1%, however this will increase in stages up to 3%.
Auto Enrolment is a requirement that employers cannot avoid. As the employer you are legally responsible to ensure compliance, and fines are issues and prosecutions pursued by the Pension Regulator for non-compliance. There is a lot of information available to help and support employers on the internet, however I would strongly recommend starting with The Pension Regulator’s site. There’s nothing like getting information straight from the source.
But if you do have any questions in relation to payroll and auto enrolment, communication with your employees and whether you need a scheme based on employee eligibility you can mail [email protected] or call 01384 92 90 20