In 2012, The Pensions Regulator’s slogan for workplace pensions was “We’re all in”. After a five year role out “We’re all in” may finally be accurate.
Businesses have been undergoing a staging process since the introduction of auto-enrolment that saw the largest employers meet their duties first. In July and August 2017, the last of the smallest employers or micro-employers, reached their staging dates.
Therefore, from 1 October 2017 employers hiring people for the first time will need to begin the auto-enrolment process on the day the worker starts. Planning for auto-enrolment should be carried out alongside all the other tasks associated with running a business, for example setting up PAYE scheme. This means that a new employer will have a number of obligations to meet including; identifying a pension scheme provider, writing to their workers, paying over contribution and completing a Declaration of Compliance.
In the Payroll Department’s experience the majority of employers who set up workplace pension schemes since 2012 met the minimum contribution level of 1% by the employee and 1% by the employer on earnings between £5,876 and £45,000 a year.
However, the levels of minimum contributions that must be paid into workplace pension scheme will increase in April 2018 and again in April 2019.
Those employers who have contributions calculated on a different basis such as Total Pay or Salary only, will have different minimum percentages that they must apply.
Re-enrolment and Re-Declaration
Many employers will be reaching their first triennial re-enrolment date over the next year. This is where those workers who opted-out of the workplace pension scheme are re-assessed and if they meet the criteria are automatically re-enrolled back into the workplace pension scheme.
Remember: Employers must complete a ‘Re-Declaration of Compliance’ within five calendar months of the third anniversary of
their staging date.
If you have any questions regarding Workplace Pensions please contact Ken Davies below.