Since autumn 2012, Auto Enrolment has been a compulsory obligation for companies to provide a workplace pension for employees (even if there’s just one employee). The scheme is being rolled out across the UK and not being prepared is no excuse and could cost a business dearly. If you haven’t put a scheme in place or are taking the ‘head in the sand’ approach, beware. To find out more, we talk to pensions guru Andy Parry.
Does my business have to participate?
Yes. Auto enrolment is now a legal requirement for employers to provide all of its workers with access to a workplace pension scheme and automatically enroll certain workers into a workplace pension scheme, paying contributions on its employee’s behalf. If an employer fails to comply and put the scheme in place by its staging date. It will be deemed as acting unlawfully and will incur fines of up to £500 per day.
What is my staging date?
Your staging is the date set by the Pension Regulator. This is the date, when the scheme needs to be set up by and contributions need to start. Employees would have needed to have been assessed and received any relevant communication. Even if an employer decides to opt for Postponement, employees must have received communication and employees can choose to start on the staging date irrelevant. If an employer does not know their staging date. We can provide it for them. Regardless of the staging date. The Pension Regulator recommends that employers act now in order to manage the process of setting up the workplace
pension.
Do the employer duties apply to employees who already have a plan?
Yes, even if an employee has their own individual pension or the employer already has a scheme in place. The employer will have to comply with Auto Enrolment rules. Existing employer schemes will need to be checked with the provider to ensure that they qualifyunder the rules for auto enrolment.
However, inevitably there will be added work in continuing with an existing scheme, as there are other tasks that will need to be completed, such as assessing the workforce and communicating to all employees, data management between payroll and the provider, and record keeping. There is also the declaration of compliance that will need to be completed. Employees will have the option of opting out of the scheme. However, they will have to be automatically enrolled again every three years.
Do I have to provide the same pension scheme and contributions to each of my employees?
No. As long as you provide all workers with at least the minimum requirements, you can provide different schemes and benefit structures to different groups of workers if you so wish.
What do I have to do if I appoint you?
Between us and the pension provider we will ensure that all your tasks associated with Auto Enrollment are completed with the exception of uploading your payroll data to the pension provider and paying your contributions.
Where are the contributions invested?
Scottish Widows who are one of the UK’s largest investment providers.
What if the fund goes bust?
Employees’ pension funds are protected by the Financial Services Compensation Scheme (FSCS).
There are other companies offering the services you provide, why should I choose Ideal Auto Enrolment?
- As the Managing Director of the company, I have been in the financial services industry since 1991. The employer responsibilities and duties with Auto Enrolment are complex. We understand that this can be a distressing time for employers. We can take the headache away. We can take care of the entire process for them and allow the employers and their employees to get on with their business making it straightforward and provide a complete end-to-end solution.
- Fully compliant solution – no complex decisions to make
- Includes the pension set up, communication and admin.
- No need for additional software to run the scheme.
- Employer and employee helpline.
- Employees have their own account with personal login and it’s password protected.
What happens if it isn’t sorted in time?
The reality is that employers will be in trouble with The Pension Regulator, who will impose penalties and fines. There is an immediate fine of £400 and escalated daily fines of up to £500 per day (yes, per day). There have already been employers who have been fined for noncompliance or late staging. Employers have to remember there are companies who have not started to look at their own situation.
There is also the capacity crunch issue. It is claimed that between January 2016 and 2018, the number of employers reaching their staging date will go up tenfold, reach an average of more than 100,000 a quarter and then over 200,000 in the first few months of 2017. Which is one of the reasons why the Pension Regulator has written to all employers, providing their staging dates and tellingthem to act now. There are far more employers staging in a short period of time than there are pension providers and advisers to help the employers with their obligation. This is an unprecedented volume of work for both employers, providers and advisers.
What does an employer need to do in order for you to help them?
They can either telephone our offices or email us and we have a short video on our website that is quite informative.
We can either arrange to meet the employer face to face or, if the employer does not have the time to meet or feels that they want a lower cost option, we can complete their application by telephone and we can send them a pre-populated electronic application, which will save them time and money.
Ideal Auto Enrolment Solutions Ltd
Tredomen Business & Technology Centre
Tredomen Industrial Park
Hengoed CF82 7FN
01443 819800
info@idealautoenrol.co.uk
www.idealautoenrol.co.uk
