Here is a basic guide to Auto-Enrolment. To understand how Auto-Enrolment impacts your business and your specific requirements you will need specialist advice as this is a complex area.
What is Auto-Enrolment?
It is a legal requirement for businesses to set up and pay into a qualifying workplace pension scheme (QWPS) for their employees. Non-compliance will result in fines and potential imprisonment.
Does Auto-Enrolment apply to every business?
Subject to one or two exceptions Auto-Enrolment applies to all businesses irrespective of size.
What do you need to do?
Each employer, depending on size, has been given a date when they will need to designate a qualifying workplace pension scheme into which they will automatically enrol all of their eligible employees.
You will have to assess your employees to see if they are eligible. Employees who are deemed to be eligible are employees who are not already in a workplace pension, and who:
- earn over £10,000 a year (£833.33 a month)
- are aged 22 or over and are under State Pension age
You will have to make contributions on an employee's behalf and you are obliged to tell your employees about the implications of Auto-Enrolment and how it will affect them.
You will also have further obligations to those employees that do not meet these criteria, and the qualifying workplace pension scheme will require a default investment option.
Do we need to do anything if we already have a scheme?
You may need to make some changes to an existing scheme to ensure it is compliant with all the Auto-Enrolment requirements.
When does Auto-Enrolment apply from?
|Employer size (by PAYE scheme size) or other description ||Auto-Enrolment start date (determined by your PAYE reference)|
| ||From ||To|
|250 or more members ||1 October 2012 ||1 February 2014|
|50 to 249 members ||1 April 2014 ||1 April 2015|
|Test tranche for less than 30 members ||1 June 2015 ||30 June 2015|
|30 to 49 members ||1 August 2015 ||1 October 2017|
|Less than 30 members ||1 January 2016 ||1 April 2017|
|Employers without PAYE schemes ||1 April 2017 ||-|
|New employers Apr 2012 to Mar 2013 ||1 May 2017 ||- |
|New employers Apr 2013 to Mar 2014 ||1 July 2017 ||-|
Compliance with the rules is not just about having a pension scheme in place.
The payroll process will change going forward and when your staging date arrives, you will be required by law to automatically enroll any eligible employees into a workplace pension scheme when you run your payroll.
Timing is crucial, for example, an employee turning 22, can mean moving from being a non-eligible jobholder to an eligible jobholder, at which point they need to be auto-enrolled. Systems need to be in place to accommodate all eventualities.
Hazlewoods Payroll offers a professionally-led, dynamic service that addresses the critical areas of Auto-Enrolment.
How can Hazlewoods Financial Planning help?
We can make a potentially complex world a whole lot simpler.
We offer easy solutions to support you in meeting your duties and we can help ensure that your employees understand the benefits you are providing.
We can support you throughout the implementation of your qualifying workplace pension scheme, providing fast, simple solutions that make sure you and your employees get the very best outcomes.
With the latest technology and a flexible approach, our Payroll team can also ensure that your Auto-Enrolment obligations are being met on an on-going basis.
We can work with you to ensure you meet your obligations and if you are interested in seeing how we can help, please contact Gary Cook on 01242 680000.
This document is based on Hazlewoods current understanding of auto-enrolment and is subject to change.