You’ve seen the adverts saying ‘don’t ignore the Workplace Pension’, but do you know exactly what you need to do?
We have set out below a list of the main things that you need to consider. Will you have the time to deal with all of this and continue to run your business?
- Do you know your Staging Date (the date from which your business has to comply with the new rules)?
- Do you have an existing pension scheme or contribute to individual pensions for your employees? If so, have you checked if they can be used for Automatic Enrolment? In many cases you won’t be able to.
- Do you know there are several different definitions of pensionable pay that you can use to comply with the rules? If you choose the wrong one you will end up paying £1,000s more in pension contributions than needed.
- Have you factored the cost of the pension premiums into your budget going forward?
- Are you aware that you will need to increase the pension premiums in April ’18 and April ’19 irrespective of your Staging Date?
- Your current payroll provider or system may not be compatible with many of the pension schemes. You will you need to check the impact on your payroll.
- Automatic Enrolment does not end once you reach your Staging Date. You have to assess and make the necessary changes every time you pay your staff. If you have a weekly payroll then you will have to do this 52 times a year.
- As an employer, compliance with the rules is your responsibility. This includes an ongoing duty to make sure your pension scheme continues to meet the rules and that the default investment fund chosen is still fit for purpose.
- There are around 1.5 million employers who have to go through this process by the end of February 2018. Getting organised in advance is highly recommended. As time goes by, there will be less chance to get help and less pension scheme providers available. It is estimated that many will pull out of the market as they reach saturation point.
What should you do now?
This list is just a snap shot of what employers have to deal with. Getting it wrong can result in heavy fines from The Pensions Regulator.
Tait Walker offers an initial consultation at our cost, including reviewing any existing pension schemes and how your payroll setup will cope with Automatic Enrolment.
If you would like to discuss this further, please contact our Employee Benefits Consultant, Ian Marsh.