Auto enrolment – should I panic yet?

The Governments’ Pension Reforms continue to have a significant impact on employers as small employers are, for the first time, having to automatically enrol eligible employees into Workplace Pension Schemes, pay contributions and collect employee contributions.  Between now and September 2017 ALL employers with employees aged 16 – 74 will be required to comply with the new regulations.

What action do you need to take?

• If you have not already done so, establish your Staging Date (the date by which you will be expected to comply);
• Assess your workforce;
• Select a suitable Qualifying Workplace Pension Scheme;
• Keep records of all aspects of the scheme;
• Monitor your workforce to ensure ongoing compliance with the Regulations;
• Communicate initial enrolment and any further changes to you employees.

Employers need to establish what will be required of them and not underestimate the scale or cost of the work involved. The Pension Regulator is empowered to issue significant penalties if they think employers are in breach of their compliance duties, coercing their employees to opt-out or committing employment discrimination by age or earnings.

You may need to seek the advice of an Independent Financial Advisor or you may find it’s possible to work with an existing pension provider if you already have a scheme in place. If you have no scheme in place you may need to undertake a Trust Based arrangement known collectively as Master Trusts such as NEST, Now Pensions or The Peoples’ Pension.

Many Payroll Providers are introducing “bolt-ons” to their programmes that may assist, at a cost, in the administration and record keeping.

Pressure on all providers and advisers will intensify as a large number of smaller employers reach their staging dates in the coming months, and it will start to become increasingly difficult to get advice or assistance. We recommend that you start the process at least 1 year before your Staging Date to allow enough time to comply.

There are new regulations surrounding director only businesses and Personal Services workers (such as au-pairs, nannies, carers, private midwifes etc.) which may mean that you are exempt from auto enrolment duties. If you think you are exempt you will still need to inform the Pension Regulator so that they remove you from their database.

If you have a query on any point raised in this article please contact Carolyn Cunningham, Payroll Manager at Wright Vigar, on 01522 531341 or email Carolyn at carolyn.cunningham@wrightvigar.co.uk – we would be delighted to help you!