WHAT IS AUTO-ENROLMENT?
Auto-enrolment requires all employers to offer employees a pension and automatically enrol ‘eligible’ employees in a workplace pension. Under auto-enrolment, total contributions must be at least 8% with the minimum employer contribution being 3%.
WHAT DO I NEED TO DO AS AN EMPLOYER TO BE AUTO-ENROLMENT COMPLIANT?
The key initial steps for employers include:
- Choose a Pension Scheme: Select a pension scheme designed for auto-enrolment.
- Identify Eligible Jobholders: Assess which employees qualify to be automatically enrolled into the pension scheme on your duties start date.
- Communicate with Employees: Inform each staff member about how automatic enrolment affects them within six weeks of their duties start date.
- Complete Declaration of Compliance Submission: Submit electronic details about eligible employees to TPR within five months of their duties start date.
DO I HAVE ANY ON-GOING DUTIES AS AN EMPLOYER UNDER AUTO-ENROLMENT?
Employers have certain on-going duties under auto-enrolment which they must understand and adhere to in order to ensure compliance and avoid fines imposed by The Pensions Regulator (TPR).
- Monitor Eligibility for Future Enrolment: For employees initially not enrolled into the pension scheme, monitor their earning levels and ages for potential future enrolment.
- Issue communication to any newly enrolled employee.
- Make Contribution Payments: Ensure timely contributions are made each pay period.
- Manage Joiners and Leavers: Handle ongoing requests for joining or leaving the pension scheme.
- Maintain Records: Keep and maintain employee and pension scheme records for statutory periods.
- Re-enrolment and Re-declaration: Re-enrol and re-declare for staff members who opted out every 3 years.
WHEN DO I HAVE TO START COMPLYING WITH AUTO-ENROLMENT DUTIES AS AN EMPLOYER?
Auto-enrolment duties start as soon as you employ someone. This is also known as your ‘Duties Start Date’.
CAN I DELAY PUTTING STAFF INTO A WORKPLACE PENSION?
Employers may defer auto-enrolment for up to three months through postponement, following the necessary guidelines.
I DON’T HAVE ANY STAFF WHO MEETS THE AUTO-ENROLMENT CRITERIA – DO I STILL HAVE ANY DUTIES UNDER AUTO-ENROLMENT?
You may have some or all employees who may not meet the auto-enrolment requirements (they are too young or don’t earn enough), however, under auto-enrolment legislation:
- you still need to formally assess them as part of your auto-enrolment duties from the day they start working for you.
- You will also need to send them an assessment notice telling them what their rights and options are, and
- submit your declaration of compliance to the Pensions Regulator telling them how you are complying with your auto-enrolment duties.
Understanding and fulfilling auto-enrolment duties are critical for employers to comply with legal obligations, avoid penalties, and secure employees’ pension rights. Regular reviews of guidelines and maintaining accurate information are recommended to ensure compliance with TPR regulations.