You are no doubt aware of automatic enrolment and may well have received correspondence about it from HMRC. Here is a brief summary of what is involved:
Employers in the UK have been issued with a “staging date” from this date the employer will be required to enrol certain staff into a pension scheme and make contributions. You will have to tell your staff about the scheme you put them in and allow other staff to join if they request to do so.
Which staff are eligible?
- Any employee aged from 22 to the state pension age earning over £10,000 per annum gross (or £833 per month) is automatically enrolled (they have the right to opt out).
- Employees who are older than state pension age or younger than 22 have the right to opt in and you will have to contribute.
- Employees who earn less than the qualifying amount have the right to join a scheme but there is no requirement for you to contribute.
How much to contribute? Before 30/9/17 the employer’s minimum contribution is 1% of the employee’s salary and the total contribution has to be a minimum of 2% of the salary. This rises to 2% and 5% from 1/10/17 to 30/9/18 then 3% and 8% from 1/10/18.
What records need to be kept? At every pay run you need to assess staff to ensure they to ensure they are being treated correctly for example as a result of birthdays or payrises and a record needs to be kept that this has been done. You will also need to deal with any starter or leavers and employees opting in or out.
How to communicate with staff? After your staging date you need to write to your staff about how automatic enrolment affects them. Staff will need to be contacted on an ongoing basis, in particular any who have opted out should be contacted and given the option to opt back in.
What you need to do next:
- Find out your staging date, visit www.tpr.gov.uk/staging-date and enter your PAYE reference.
2. Provide a point of contact, visit www.tpr.gov.uk/nominate-contact
3.Choose a pension provider, if you have a pension in place you may wish to check if this is compliant, otherwise you should look at the government product NEST or talk to a financial adviser.
Contact me and let me know if you would like more information or to take advantage of my affordable Automatic Enrolment solution.