Pensions law for employers is changing. It is very important, as an employer, that you understand what you need to do and by when to avoid a fine.
The new pension regulations default scheme
Under the Pensions Act 2008, all employers regardless of how many people they employ, must auto-enrol their employees on a workplace pension scheme. Employers need to ensure that they and their employees contribute towards the pension scheme to ensure compliance with current legislation.
With the new pension regulations looming, it’s important to act quickly to ensure you don’t fall foul of the rules. Every employer with at least one member of staff will have enrol their eligible staff into a workplace pension scheme by 2018 . And contribute towards it.
Whether you’re a business owner, or senior manager of a small business, you may already be snowed under by the current level of regulations without having to worry about new pension rules as well. However, procrastination is liable to land you with an avoidable fine of £400 or more.
Your employees may not have to do anything to be automatically enrolled into their pension. However, you as their employer most certainly do.
Eligible employees are permanent staff aged 22 and up to retirement age who earns more than £833 per month (£192 per week). Even if you are the only eligible employee in your business, you still have compliance duties.
You can check more about your compliance duties at the Pensions Regulator site by clicking here. However, if you are still unsure of what else you need to do, take advice from a pensions expert who can help you plan for the new default pension scheme.
What can I do now to organise auto-enrolment for my staff?
You’ll need to plan ahead and make sure that you know your staging date.
Your staging date is the date by which you need to have a scheme in place. It would also helpful to communicate with your staff and help them see this as a positive step forward. Don’t rest on your laurels, or act like an ostrich. Burying your head in the sand will not auto-enrol your employees into their pension scheme.
If you don’t want to be one of over 1500 employers who have already been handed down a fine, then take action now.
You will be responsible for choosing a pension scheme for your employees and working out how much to pay into that scheme. It is also your legal duty to write to your staff within 6 weeks after your staging date to explain how automatic enrolment applies to them.
Make sure that you check your staging date and also your declaration date. Your declaration date, is the date by which you must declare how you have met your legal duties to the Pensions Regulator. This can be done by using an online form also known as your declaration of compliance. If you feel that you are running out of time, or find the process to complex, there are lots of pensions experts who can help you make your Declaration of Compliance. Avoid a fine and take some advice for employers on auto-enrolment, workplace pensions and retirement.
How do I get advice on auto enrolment and avoid a fine?
If you’re unsure of how to proceed, and want to avoid a fine, it’s wise to consider assistance from a financial planning expert.
There are many experts available to help you to ensure that your employees are correctly auto-enrolled and that you are fully compliant with the current pension regulations.