Firstly, what is automatic enrolment?
Staging for small and micro employers is due to rise over the next few years. All employers are now legally required to enrol certain staff into a pension scheme and to make contributions. The first step to complying with your duties under auto enrolment is simple. Establish your staging date.
If it’s automatic then surely I don’t have to do anything?
No, sorry. It is only automatic for staff, not for the employer.
I only have five employees. Am I exempt from enrolling?
No again. Every employer with at least one employee must comply with auto enrolment.
What is a staging date?
This is the date that your automatic enrolment duties apply.
How can I find out my staging date?
Easy. The Pensions Regulator sends out letters letting employers know their staging date. If you haven’t received a letter, enter your PAYE reference at www.thepensionsregulator.gov.uk to find this date.
I don’t have any staff. Do I still have to comply?
If your only staff members are directors, then you might not have any duties under the new scheme. However, you will have a duty if more than one director has a contract of employment. Check thoroughly and don’t assume anything.
Who do I need to enrol?
You won’t know until you find out the age and rate of pay of your employees. This will determine who has to be enrolled.
What happens if I don’t comply?
Employers that don’t comply will face enforcement action. This could be a fine or prosecution – or both.
What are the steps I need to follow?
The recommended steps are as follows:
- Find out your staging date
- Provide a point of contact
- Establish who you need to enrol
- Prepare your action plan
Who should be my point of contact?
The employer will be the primary point of contact but you can nominate other people too, such as an accountant, book keeper or payroll provider. They can implement the process on your behalf and most importantly, take away the hassle for you!
Confused? Talk to the expert: