Workplace Pension Auto-Enrolment
Did you know that the law states that employees must be able to obtain a Workplace Pension when working for an organisation in the UK? The first question that needs to be answered is ‘Who is entitled to a Workplace Pension?’
Any employee aged between 22 and the State Pension age, whose income is more than £10,000 a year within the UK, is entitled to a workplace Pension. Automatic enrolment began in October 2012, starting with larger employers. Over a period of six years, medium and small sized employers are joining the automatic enrolment.
When employers enrol on behalf of employees onto a Pension Scheme, the first thing to do is to make sure they send contact information to The Pension Regulator. These details should be for the most senior person within a company or organisation for example, a Chief Executive Officer or Managing Director.
Step two is to stage a date. This is when the new automatic enrolment duties come into force for a particular business. It is dependent on whether enrolment of the staff is necessary in terms of eligibility for a pension and also the number of staff working for the company. The next
Staging Date deadline is Thursday 1 September 2016 and employers are well advised to be prepared ahead of this day.
It is important to make sure that employers do not take action to jeopardise employees from enrolling in the pension scheme.
There are many penalties for those who do not comply with a Workplace Pension. There is a fixed penalty notice which is set at £400 as well as other penalties that vary in the size of the fine according to the number of employees within an organisation. These penalties include:
> An escalating penalty (ranging from £50 to £10,000 per day depending on number of staff)
> A civil penalty (ranging from £5,000 to £50,000 on an individual or the business itself bases)
> Prohibited Recruitment Conduct Penalty Notice (ranging from £1,000 to £5,000 depending on number of staff)
The workplace Pension enrolment requires a significant level of information in order to register employees. You will have to give:
Once you have auto-enrolled the appropriate employees in your organisation, a submission of a declaration of compliance to The Pensions Regulator must be undertaken.
Incidentally, auto-enrolment duties to the Workplace Pension do not apply if you are a Sole Trader, with no other staff.
If you would like to know more about how to enrol your staff to a workplace pension scheme please do not hesitate to contact the office.
Author: Lorraine Wilkinson
Lorraine joined Scott & Wilkinson in 2001 bringing with her over 20 years payroll experience. As payroll manager, she oversees the smooth running of the firms payroll bureau which includes all aspects of day to day payroll. Lorraine is...
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