Workplace pensions were introduced in response to difficulties arising from increased life expectancy and low pension savings. The initiative requires employers to automatically enrol eligible workers into a qualifying pension scheme and is being introduced on a staged basis according to business size.
Eligible employees must be automatically enrolled into a pension scheme which both the employee and employer contribute to. Workers who are not eligible for automatic enrolment must be enrolled should their status change. Each qualifying pension scheme must meet minimum standards in respect of the choice of investment fund and the level of contributions made. Employers can choose the pension scheme they use, which could include the National Employment Savings Trust (NEST) or other pension plans designed exclusively for smaller businesses.
It is vital that you are aware of your duties in order to prepare you for your “staging” date.
You may be a hairdresser, an architect or employ a personal care assistant, but if you employ at least one person you are an employer and you have certain legal duties. The Pension Regulator has issued thousands of compliance, unpaid contributions notices and fines to date and are getting ever more aggressive. Fines start at £400 and can be £50 daily for non- compliance! So small business owners need to:
establish a qualifying work place pension scheme,
ensure the scheme has an appropriate default fund,
issue statutory communications to all employees and
enrol all eligible jobholders into the scheme.
Do you have the time to do all this and run your business?
Ask yourself “How do I choose the right pension scheme, is my payroll Auto Enrolment compliant, how are you going to tell your pension scheme what to collect and where to allocate contributions?” If you’ve not done anything about preparing for Automatic Enrolment, talk to us as we can help you with our fully compliant payroll, workforce assessment and pension selection processes and help you avoid the wrath of the Regulator and get on with what matters most - making your business a success.
Do not leave this until the last minute, or think “it doesn’t affect me” because anyone with a PAYE reference MUST comply and as noted above there are serious fines for non-compliance. There are limited exclusions for single-director/employee companies and we understand these.
Many businesses are looking to implement qualifying plans before their staging date, as they recognise the positive impact that early adoption is likely to have on their workforce. Additionally, early adoption will help to avoid the delays that can occur as insurance companies and advisers come under stress from the volume of new cases.
Please talk to us about Auto Enrolment, we have direct access to Champion Financial Advisors Ltd and we can help make compliance as smooth as possible!