Company News, Uncategorised
Pension Auto-Enrolment Deadlines for Small Companies Fast Approaching
Ever since the Pension Act 2008 came into effect in 2012, every employer in the UK was legally required to put certain employees into a pension scheme and make a contribution. The process was called auto-enrolment.
What confused many employers was that even though there was a big media announcement that it was a legal requirement, not everyone had to do it immediately. There was a lot of hype, but no immediate need to act for many employers, which left many wondering what all the noise was about. Yes, large employers with thousands of staff had to act immediately, but small employers who account for 99% of Britain’s businesses were not required to bring in auto-enrolment for at least 2 years.
With so many other pressing business concerns, it’s no wonder that pensions enrolment quickly dropped off the radar of small employers, which was fine then, but not now, because auto-enrolment deadlines for small firms are fast approaching. Yes, the requirement to auto-enroll staff into a qualifying pension scheme has now reached smaller employers of 30 staff and fewer.
Don’t panic if you have 30 or less employees and haven’t enrolled, because once again this will be a staged process, starting from July 2015 last year, ending in April 2017. Chances are you probably haven’t hit your staging date yet, but if you have missed your staging date, you’ll need to act now and notify The Pension Regulator immediately, and they’ll explain what you need to do to get up to date with payments.
So, if you are due to start your auto-enrolment pension shortly, what do you need to do? Firstly, you’ll need to find out your PAYE reference number and then visit this page and you’ll be able to work out your auto-enrolment pension staging date, which is the date from which you’ll need to offer a qualifying pension.
Great, so you’ve got your staging date. Now what? You’ll probably want to know the employer contribution rates, so you can budget for increased expenditure. Well, as it stands you’ll need to play 1% of earnings until 6 April 2018, 2% until 6 April 2018 and 3% thereafter.
Next, you’ll need to set up an administrative vehicle for making these monthly contributions. You have two main options:
The first is to use NEST, which is the government sponsored National Employment Savings Trust. Employers and employees can managed monthly auto-enrolment contributions here. It might not be as slick as some of the private sector pension systems out there, but at least it’s free to use.
The second option is to use a private sector, qualifying pension scheme to manage auto-enrolment. If you already have a work-place pension your provider will be able to adapt your pension to suit auto-enrolment requirements. If you don’t have a pension, rest assured all the main pension providers are biting employer’s hands off to help them with auto-enrolment. Just give any high street pension provider a call and they will guide you through the entire set-up process.
Good luck with setting up your auto-enrolment pension.