Ignore your auto-enrolment staging date at your peril

Ignore your auto-enrolment staging date at your peril

Workplace pension law has changed and every employer will have to act to fulfil their new legal responsibilities.

With the average age of the population increasing and not enough people saving for retirement the government has introduced a scheme that sees employees and employers pay in to provide more sustainable retirement income.

A workplace pension is a way of saving for your retirement that’s arranged by the employer.
They work by the employee contributing a percentage of their pay into the pension scheme automatically every payday and in most cases, the employer must also add money into the scheme too. There is also tax relief from the government.

As an employer there are a few vital things you need to know and do in order to stay compliant, says Katie Bowmer at TBD Associates:

Know your Staging Date
This is the date that the new law applies to your company. You can find out your staging date by using your PAYE reference and visiting. http://www.thepensionsregulator.gov.uk/employers/what-is-my-staging-date.aspx

Assess your Workforce
Workers who need to be automatically enrolled in a pension scheme are called ‘eligible jobholders’. An eligible jobholder is: Aged between 22 and state pension age, working in the UK and Earning above £9,440 per annum.

Review your Pension Arrangements
If you have an existing pension scheme for your workers, you may wish to consider enrolling all eligible jobholders into this scheme. To do this the scheme must qualify as ‘Auto Enrolment Ready’. If you do not have a scheme in place already you will need to choose a pension provider. There are a number of providers including NEST, NOW and People’s Pension amongst others.

With the majority of companies staging between 2015 and 2017 it is vital that employers find out their staging date, contact their chosen pension provider (or speak to an Independent Financial Advisor) to set up a qualifying scheme and liaise with their payroll provider to check that they have the capability to make the contributions through the wages.

Don’t leave it too late, if you miss your staging date and have eligible jobholders who should have been enrolled into a qualifying scheme you could face large fines and even jail time.