Workplace Pensions...are we all in?
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.
Director of Payroll0151 4237500Widnes