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.
Knowing the correct staging date can be complicated and we therefore 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.
Further Information - Contact our Auto-Enrolment Team:
Should you have any queries about the details contained in this guide or would like further advice about meeting your Auto-Enrolment obligations, do not hesitate to contact our Auto-Enrolment specialists below.