Pensions law has changed. Every business has to automatically enrol eligible workers into a qualifying pension scheme. If you don’t, you may have to pay substantial penalties. If you already offer a pension scheme to your employees, such as a stakeholder pension, you may think that you’re exempt – this is not the case, because many pension providers won’t open existing schemes to auto-enrolment. You’ll need to review any existing pension offering to ensure that it complies with the new regulations.
A qualifying pension scheme must be selected well in advance of your auto-enrolment date. Your employees are then assessed into two categories, by age and earnings, to establish who should be automatically enrolled. The assessments will be made by us using up to date specialist payroll software design to deal with this. You will have different obligations for each category of employee, but all must be informed of their automatic enrolment options, in writing, at key stages in the process.
You must make arrangements so that the worker becomes an active member of your qualifying scheme with effect from their auto-enrolment date. Pension deductions are taken from the employees’ pay and paid to the pension provider, together with contributions from you, the employer.
Once you’ve passed your staging date new employees must be auto-enrolled. Existing employees who did not qualify at staging due to age and earnings will need to be assessed at each pay period to see if they should be auto-enrolled at that point, and you’ll need to go through the whole process again in 3 years’ time to re-enrol anyone who has opted out…
The Pensions Regulator acknowledges that auto-enrolment represents a massive cultural change in the UK, with the aim of improving the standard of living of all those in retirement. This is a long term ambition in which providing a pension for employees becomes simply a part of being an employer in the UK.