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Auto-Enrolment is Here - What SMEs Should Know

From 1 October 2012, automatic enrolment legislation was implemented, with staging dates starting for UK employers to automatically enrol eligible workers into a pension scheme and make minimum contributions on their behalf. Safeguarding duties will apply regardless of whether they have reached their staging date.

The new auto-enrolment legislation has caused some confusion and concern for 'smaller' employers obliged to provide access to a suitable defined contribution scheme, with many of them struggling to find pension providers willing to set up stakeholder schemes to enable them to comply with the existing legislation that is effectively being over-ridden by the introduction of auto-enrolment.

The good news is that the Department for Work and Pensions has confirmed section 87 of the Pensions Act 2008 will repeal most of the requirements for employers with five employees or more to provide access to a suitable defined contribution scheme and so employers may no longer have to provide any pension scheme for their staff between 1 October 2012 and the final staging dates in February 2018.

If you employ more than 120,000 staff your business has already hit the 1 October 2012 staging date, and for companies employing between 50,000-119,999, your staging date is 1 November 2012 and for companies employing between 30,000-49,999, your staging date is 1 January 2013. Staging dates for companies employing less than 30,000 employees will roll out from 1 February 2013 through until 1 February - Full details of the Staging Dates for Employers can be found on the Pensions Regulator Website.

For those employers not yet impacted by auto-enrolment, here are seven steps you should take to prepare:

  1. Know your staging date - when to act
  2. Assess your workforce
  3. Review your pension arrangements
  4. Communicate the changes to all your workers
  5. Automatically enrol your 'eligible jobholders'
  6. Register with The Pensions Regulator and keep records
  7. Contribute to your workers' pensions

Remember, Employers have to automatically enrol workers who:

  • Are not already in a qualifying workplace pension scheme;
  • Are at least 22 years old;Are below state pension age;
  • Earn more than £8,105 a year; and
  • Work or ordinarily work in the UK (under their contract) 

However, even if employees do not qualify to be automatically enrolled, they still have the right to join the scheme. If an employee tells their employer that they would like to opt in to the scheme, their employer must allow them to do so.

EmployEasily HR Services have already helped numerous Clients ensure they are meeting their obligations under UK Pension Regulations.  

If you would like more information and/or support to ensure your business is prepared and compliant simply contact us today on 0800 612 4772 to arrange a Free Consultation.

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