Auto-enrolment, is your business ready?
Auto-enrolment is here, washing across the UK in a wave of jargon and confusion that many small business owners just aren’t ready for! Well don’t worry, this blog should shine some light on your responsibilities as an employer, hopefully before you hit your looming staging date.
So what actually is auto-enrolment?
Well, it’s a government initiative designed to encourage more people to put money aside for their pensions; to reduce the burden of an aging population on the State. It will ensure that all eligible jobholders are entered into a qualifying workplace pension scheme from the staging date, leaving them with some retirement provision to call upon in later life!
These new rules are naturally taking employers out of their comfort zone. They must put a pension scheme in place, even though many have little knowledge or experience of the enrolment process. Your first step should be to find out your staging date. Most companies with 50 or more employees will have already staged. The vast majority of UK SMEs are staging over the next two years. To find your staging date, if you don’t already have it, please click here and put in your PAYE reference.
Will auto-enrolment apply to all workers?
No, only those that meet the following four criteria are eligible for auto-enrolment:
- Those aged between 22 years and the state pension age;
- Those earning more than £10,000;
- Those working in the UK;
- Those not currently paying into a qualifying pension.
But don’t forget, even if a member of staff doesn’t automatically qualify for auto-enrolment they might still have the right to opt-in. As the employer, you must be able to arrange this.
Equally, some staff may wish to opt-out, but you can’t induce them to do so.
There are a myriad of pension providers out there, but not all want to offer schemes to small businesses; and of those that do some are better than others. It is also the employer’s responsibility to make sure they select the best scheme for their workforce.
You can do auto-enrolment yourself. But with thousands of pages of guidance on the regulators website to trawl through, not to mention big fines if you get it wrong, it’s not surprising that many are looking to outsourced providers to manage the process for them. It can help them save time, money and minimise the risks. The HR Dept can do just that, taking the whole process out of your hands, so get in touch today to see how we can help your business with auto enrolment.
And don’t forget, you’ll need to update your HR documentation to reflect your new pension scheme!