Workplace Pensions & Auto Enrolment
Since April 2012, all UK employers are legally obliged to automatically enrol all eligible workers into a qualifying pension scheme by a specific deadline, known as the ‘staging date’.
Where this applies you must by law create and maintain detailed records of correspondence with workers, workforce assessments, joiners and leavers and pension payments. This is one of the most onerous challenges to face businesses in recent years and the financial penalties for breach can be severe.
What are my duties as an employer?
You will have a duty to assess (and continually reassess) your workforce to be able to identify which of your employees will be eligible to be automatically enrolled. For this purpose, workers have been arranged into three categories:
- Eligible Jobholder
- Non-Eligible Jobholders
- Entitled Workers
Whilst only Eligible Jobholders are required to be automatically enrolled, Non-Eligible Jobholders have a right to opt-in to an automatic enrolment pension scheme and Entitled Workers have a right to join any pension scheme. It's your responsibility as an employer to ensure that you communicate with each individual worker to ensure they're aware of their rights.
It's also necessary for you to set up a qualifying pension scheme. This involves working with a financial adviser to review any existing pension arrangements or to design a new scheme that will suit the automatic enrolment criteria.
Once set up, you'll be responsible for ensuring that both employee and employer contributions are paid into the scheme at the correct amount and the payroll accurately reflects these contributions.
Throughout each stage of the automatic enrolment cycle, you must create and maintain detailed records. These records must be available for review by The Pensions Regulator whenever requested.
Your employees must be aware of their rights and you must be aware of your duties and be ready to act on them to avoid breach of the rules and imposition of financial penalties.
Small businesses need to plan ahead
Small business owners and managers can’t afford to ignore auto enrolment. It's a complex minefield and with penalties for non-compliance it’s certainly worthwhile investing the time to get things right from the beginning. The recommendation from is to allow 6 months to a year of planning before your own ‘go-live’ date, known as a staging date.
Do you have a question? Speak to one of the team on Norwich 01603 931177
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