Last week, Part I of our Pensions Law blog introduced you to the new Automatic Enrolment legislation that is being introduced in stages over the next four years for all businesses that have at least one UK worker in the UK with a minimum of £9440 per annum in qualifying earnings. We discussed the mandatory staging dates as well as gave you some insight into choosing a pension scheme for your company.
Keep reading for Part II, and remember, automatic enrolment doesn’t have to be complicated or time consuming for your business. JSO have teamed up with an IFA so that we can best advise our clients at the appropriate time and we’ll also deal with all of the extra data processing that is required.
Registering with the Regulator
You are legally obligated to register with the Pensions Regulator and provide them with certain information about auto enrolment within your business, including the number of people you’ve enrolled, how many people were already in a pension scheme with you and which scheme you’ve chosen for your business. You must provide exact numbers and details and this must be done within four calendar months of your staging date or you could be fined.
How to Make Contributions
There are several different types of contribution schemes but most will require an employer to pay a minimum of 8% of the employee’s qualifying earnings – this includes at least 3% from the employer and in many cases, 1% of Government tax relief.
Opt-out and Opt-In
Employees do have the right to opt out of the pension scheme chosen by your business and if this is within one month of enrolment, they must be paid back any contributions deducted from their pay. Likewise, employers are obligated to put certain other workers, besides eligible jobholders, into a pension scheme if these employees ask – more information will be available about this soon.
It is important to remember that employees’ decisions to opt in or opt out should be made without influence from the employer.
Complete and accurate records must be kept about your workers and their pension scheme for a minimum of six years in most cases. Records can be kept electronically or on paper but must be legible and available if regulators ask to see them. You will also need to keep information on the ages and earnings of each of your employees.
Communicating the Changes to Staff
It is important that you inform your employees about all of these changes and how they will be affected by them – it’s the employer’s duty to provide the right information at the right time and to ensure that it is complete and correct. The information must be provided in writing, which can include email. As the information will most likely include personal data and details, you should write to each worker individually. There will however be certain updates that you can provide generically, for example, joining packs or information about employees’ rights to opt in.
If you would like to discuss how the changes are going to affect your business, call us now.
Remember, we will take all the time, effort and confusion OUT of automatic enrolment for your business – telephone us now on 01892 770612.