Auto Enrolment – Are You Ready?

Auto Enrolment – Are You Ready?

stock-exchange-913964_1920In 2008, new regulations were introduced that means businesses employing one or more workers will need to:

  • Set up a workplace pension that meets the new rules
  • Automatically enrol qualifying employees
  • Pay contributions into the scheme
  • Maintain the scheme for joiners and leavers.

The new duties are being introduced gradually with smaller employers (less than 30 staff) having to commence their scheme between January 2016 and April 2017. The exact commencement date will be communicated by the The Pensions Regulator to each firm at least 12 months before their staging date. All employers have a staging date based on how many employees were on their payroll on 1 April 2012.

Who will be enrolled?

Each business will be required to enrol and make contributions for anyone who:

  • isn’t already an active member of a qualifying scheme works or usually works in the UK and
  • earns more than £10,000 a year and
  • is at least 22 years old but under State Pension age.

These are known as ‘eligible jobholders’.

The auto enrolment earnings trigger of £10,000 applies to the 2015/16 tax year and is reviewed every year by the government.

You’ll also need to enrol the following workers if they ask you to:

  • non-eligible jobholders
  • workers without qualifying earnings (earning less than £5,824 per annum), also known as entitled workers.
  • You’ll need to make contributions for non-eligible jobholders as well and you can choose to make contributions for workers without qualifying earnings, but you don’t have to.

Your Responsibilities to Your Workers Starts Now

You have a legal responsibility to let your workers know how the reforms affect them, even if they’re not eligible for auto enrolment. That means telling them:

  • whether they’re being  automatically enrolled or have the right to opt in
  • whether they’re entitled to contributions from you and how much they’ll need to contribute
  • about the scheme you’ve chosen when they’ll be affected.

The new duties mean you’ll need to make a minimum level of contributions on behalf of many of your workers. The legal minimum contribution for all jobholders is currently 2 per cent of their qualifying earnings. Of this, employers need to pay at least 1 per cent.

National Employment Savings Trust (NEST)

NEST is one way employers can discharge these responsibilities, it was set up by the government to help ensure that every employer has access to a workplace pension scheme that meets the new pension rules. NEST offers help to employers with the following benefits:

  • has been created specifically to meet the new rules
  • Is a not for profit organisation
  • Offers online tool for easy management and administration by employers and their agents
  • Has an award winning investment approach.

Remember – Employers cannot ignore auto enrolment, fines will be imposed for non compliance.

How We Can Help

This is a brief outline of the new rules. Grange Accountancy Services can help you understand your obligations in more detail. We can help with the setup of your scheme and meeting your ongoing duties under the new regulations. We can help:

  • Assess workers for applicability
  • Manage enrolments and opt-outs
  • Calculate and process contributions
  • Capture and process data

Please call for a free consultation.