A Detailed Summary of Auto-Enrolment

What is Auto-Enrolment?

  • Under the Workplace Pension Reforms, all employers will have to place their employees (who meet certain requirements) into a pension scheme and make regular contributions to this pension scheme.
  • Members of staff will be able to opt out of this pension scheme but if they do not opt out then they must automatically remain in the scheme.
  • Staff members must be told of their right to join your pension scheme.
  • A system of fines will be introduced for firms who do not comply by their staging date.


Your Auto-Enrolment action checklist:


Our experts have put together the following action checklist that outlines the key issues you must consider now, even if your staging date remains relatively far off.

After reading this guide, you should be able to answer all of these questions in the affirmative.Should you still have any outstanding queries, please do not hesitate to contact us.

Complying with the reforms:

  • Are you aware of your staging date? Do you know what you are required to do by this date?
  • Could you identify which members of staff need to be included in your pension scheme?
  • Do you know the rules regarding recruitment of staf that are already in force?
  • Are you planning to wait for the deadline to comply or will you implement changes sooner?


Dealing with your employees:

Have you considered:

  • How you will make your employees aware of the Auto-Enrolment changes?
  • How you will sell the benefits of joining a pension scheme to your employees?
  • Do you know if your staff will lose ‘enhanced protection’ if they are auto-enrolled?


Consider the costs:

  • Do you know what the cost to your business will be if all your employees joined an existing scheme?
  • Have you started to plan for the costs of Auto-Enrolment yet?
  • Have you heard of the Alternative Quality Test?
  • Will you plan to reduce the cost of pension scheme administration and implementation?
  • How much internal resource will be needed for implementation?
  • Have you determined who will be your key person in response to the changes?


Your existing pension scheme:

  • Does your existing scheme meet the requirements of Auto-Enrolment?
  • Are you making the necessary levels of contribution to your existing scheme?


Who must be automatically enrolled into a pension plan?

Any worker earning over £10,000 per year and aged between 22 and state pension age must be automatically enrolled by their employer into a pension plan (as of April 2016).

You should also note that any of your employees who earn over £5,876, who are not automatically enrolled, can ask to join the pension plan. You are obliged to make people in this bracket aware that they can join the scheme.

A Detailed Summary Of Auto Enrolment Image

The above is a guide to your staging date based on the number employees HMRC believed you had under your PAYE reference in April 2012.

However, knowing the correct staging date is complicated by businesses that split their payroll up into smaller schemes for administration purposes. In that instance they must use the staging date of the largest PAYE scheme in the group.

For those schemes falling into the 50-249 bracket, the last two characters in their PAYE scheme is used to determine the specific staging date.

Therefore, we recommend all employers should visit The Pensions Regulator website to confirm their staging date.

Free Guides to Auto-Enrolment to Download, Print and Share:

The following guides have been co-written by our wealth management and payroll departments, specifically for employers, with the ultimate aim of ensuring that you start to prepare now to meet your duties under Auto-Enrolment and are ready to comply with the obligations when your staging date arrives.

Auto-Enrolment Detailed Guide for Employers Part 1 Auto-Enrolment Guide for Employers Part 2

Auto-Enrolment Services:

Part 1 - A Unified Solution for Employers

Click here or on the image above to download the free guide

The Workplace Pension Reforms:

Part 2: Auto-Enrolment - A Guide for Employers

Click here or on the image above to download the free guide

Further Information - Contact our Auto-Enrolment Team:

For further advice specifically regarding your pension scheme obligations and Auto-Enrolment, contact Mitchell Charlesworth’s pensions and investments division.

For specific advice regarding the administration of Auto-Enrolment and your payroll function, contact Mitchell Charlesworth payroll services.

Mitchell Charlesworth Wealth Management - Pensions & Investments:

 Richard Penn Preferred Mirror Richard Penn
Pensions and Investments Consultant


Call: 0151 255 2300
Email Richard
Twitter: @MitCharlesworth

   
Mike Wall Mike Wall
Pensions and Investments Consultant


Call: 0151 255 2300
Email Mike
Twitter: @MitCharlesworth


Mitchell Charlesworth Payroll Services:

Ken Davies Ken Davies
Director of Payroll

Call: 0151 423 7500
Email Ken
Twitter: @MitCharlesworth
   
Jo Nieman Joanne Nieman
Payroll Manager

Call: 0151 423 7500
Email Joanne
Twitter: @MitCharlesworth

Registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales and authorised and regulated by the Financial Conduct Authority for investment business