What is auto-enrolment?
It is a new law that states every employer must automatically enrol workers into a workplace pension scheme if they are aged between 22 and State Pension age, and earn more than £10,000 a year.
It is being implemented on a staged basis, with all employers having to comply by 2018.
When will it impact my business?
For businesses with fewer than 50 employees, the implementation date (or ‘staging date’) will between 1 June 2015 and 1 April 2017.
To find out your businesses staging date, get in contact.
Will every employee be enrolled?
If they meet the criteria, Yes – unless they choose to opt out. The choice is theirs, not yours as the employer.
How will it impact my business if I am an employer?
If you have qualifying employees, and if you don’t already have a qualifying pension scheme, then you will need to find one. You will then need to make contributions to the pension scheme on behalf of qualifying employees.
How much will my business need to contribute?
Until October 2017, the minimum contribution will be 2% of basic pay – with 1% of that coming from the employer (the employee 0.8%, 0.2% as tax relief).
From October 2017, this increase to 8% of basic pay (with 3% minimum from the employer).
What do I need to do, to be ready for this?
In order to be ready, there is potentially a lot that may need to be done, as an employer.
As well as looking for an appropriate pension scheme, you may also need to consider assessing your payroll software and processes, communicate with your employees, perform testing, and consider the financial costs of this additional obligations.
It is recommended that the planning for Auto-enrolment, is started 6-12 months prior to your staging date.
If you think your business might be affected . . .
Get in touch.
We can confirm for you your staging date, and how you might be impacted.