Does auto enrolment apply to me?
If you are an employer with staff working in the UK then yes, auto enrolment will apply to you.
Am I an employer?
If you are a sole trader or partnership with no people working for you (not even your spouse/partner) then you are not an employer and you do not have to comply with auto enrolment.
If you are a sole trader or partnership with employees working for you then you do have to comply with auto enrolment.
If you are a limited company and you are the only director with no people working for you (not even your spouse/partner) then you are not an employer and you do not have to comply with auto enrolment.
If you are a limited company and there is more than one director then you are an employer and you do have to comply with auto enrolment.
What is automatic enrolment and why do I have to do it?
Auto enrolment is the new legislation surrounding workplace pensions. Every employer in the country has been given a ‘staging date’. This is date that your business must be compliant and ready to operate auto enrolment pensions legislation. You can find out your staging date by entering your Employers PAYE Reference at;
http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx.
The purpose of the new legislation is to encourage people to save more for their retirement. People are living longer and under-saving for what could be a longer retirement. The new legislation is aimed at making it easier for people to save.
When will I have to do it?
Automatic enrolment duties come into force for you from your ‘staging date’.
Who do I need to put into a pension scheme?
Your employees will fall into one of three categories depending on their age and their earnings;
- Eligible – these employees must be automatically opted in to your pension scheme. They will be deducted pension contributions from their wages and you (the employer) will also have to make a contribution to their pension. If they do not wish to contribute then they must opt out of the scheme.
- Not eligible – These employees are not automatically opted into the pension. However, they are eligible to join the pension ‘if they wish’. If they do join, then you are obliged to contribute to their pension scheme in the same way that you do for eligible employees.
- Entitled – These employees are not automatically opted into the pension. They can however join the scheme if they wish. If they do join, you do NOT have to make a contribution yourself.
What do I need in order to meet legislative requirements?
You need to be compliant, and you need a workplace pension scheme.
- Compliance – You’ll need to write to each member of staff individually to tell them how they’ve personally been affected by automatic enrolment. The information you’ll need to tell them is different depending on their rights and the duties you have for them. You must also provide certain information to the Pensions Regulator about how you’ve complied with your duties.
- Workplace Pension – You will need to set up a company pension scheme. The scheme will need to be a qualifying pension scheme (one that complies with the specifications outlined by the Pensions Regulator). If you already have a company pension scheme then you will need to check with your provider that it complies for auto enrolment purposes.
For more information about auto enrolment services and payroll services please call Coates Business Services Ltd on 01733 270781 or email us at pensions@paymystaff.co.uk. More information can be found on our website at www.paymystaff.co.uk/auto-enrolment.
