Workplace pensions

Pensions auto enrolment can seem complex with many legal requirements involved. It is always best to seek advice from an expert, who may be able to make the complicated simple.  However here is some information that will help you start the process.

Auto-enrolment

By law, employers need to offer a qualifying workplace pension scheme to all employees from the first day their employment starts.  Certain employees need to be automatically enrolled into this scheme and other need to have the right to opt in or join.

This first date of employment of an employee is when your duties for auto enrolment will start, so it’s important to understand what these are.

What are your duties and what do you need to consider with auto-enrolment?

• You need to have a qualifying workplace pension scheme that can be used for auto-enrolment
• Decide if you are going to use postponement
• Choose a ‘pensionable salary’ definition
• Link with your payroll system, if you have one
• You need to understand who you must automatically put into the pension scheme and who you must not; so know their worker category (see below)
• Communicate with your employees, ensuring you issue the right communication, to the right individuals, at the right time. And know who is going to do this
• Pay the required contributions over to your chosen provide at the right time
• Opt out and refund contributions for those who request this

Okay, so you know the duties, but what are the worker categories for auto-enrolment?

What should you do if none of your employees need to be auto-enrolled?

Whilst you only need an auto enrolment scheme in place by your duties start date, if you are planning to employ staff in the near future, it can be useful to set up the scheme in advance.  Remember, even if your employees are not eligible jobholders, you are still required to complete your declaration of compliance with the Pensions Regulator.

 

You already have a pension, but how do you know if it is doing all of this?

The best way to find out if your pension is satisfying all the Pensions Regulator’s requirements is to have an independent financial adviser who specialises in corporate schemes to review your pension. These specialist employee benefits advisers will be able to look at whether:

• your pension and processes satisfy the Pensions Regulator’s requirements
• your pension supports your business
• you are using the best/correct form of communication
• your employees understand, appreciate and value your pension
• you are using the most cost-effective contribution method for your business

Would you like a checklist to use?

The checklist below is for a new company start up.  If you have an existing workplace pension, please get in touch so you can have your existing arrangement audited.

Check your ‘duties start date’ and ensure you’re well prepared to start your automatic workplace duties on time
Identify those who need to be automatically enrolled (eligible jobholders), those who need to be offered to opt in (non-eligible jobholders) and those who need to be offered to join (entitled workers)
Decide how you plan on carrying out payroll assessment and pension contribution calculations
Consider how you will manage the opt-out process
Decide if you plan on operating postponement (and for how long)
Decide on your contribution level and if this is to be self-certified
Consider whether you will be offering different tiered contributions for different groups of employees
Ensure your record-keeping processes can handle these new demands
Develop a robust communications and education plan
Establish a qualifying workplace pension scheme
Ensure all statutory communications are issues to the right employees
Introduce controls to ensure mandatory disclosure requirements are met, including communications with The Pensions Regulator
Consider when your re-enrolment date will be. This will usually be 3 years from the initial staging date

 

If you’re not ready to speak with an expert just yet, you can get information from these

https://www.gov.uk/workplace-pensions

https://www.thepensionsregulator.gov.uk/

 

If you have an accountant, they should be your first stop for business advice. If you don’t have an accountant or they can’t help, BuBul has a wide range of experts available. For more advice on workplace pensions contact our expert* George on LinkedIn

*We’ve picked experts we know and trust who are good at what they do. All of them will give you at least an extra 30 minutes free advice if you contact them and would then charge their normal prices. They don’t pay to be on BuBul and don’t give us any money from anything they earn as an expert.