Auto enrolment: Do you know your responsibilities and staging date?

Feb. 21, 2014, 11:13am

Despite the extensive exposure about auto enrolment, the new compulsory pension legislation is still bewildering for some small business employers; many not even understanding what their individual staging date and responsibilities are. Starting with the basics, let’s break down auto enrolment and what it means for your business…

What is auto enrolment and how does it affect you?  If you are an employer with staff working in the UK, auto enrolment applies to you. Put simply, you must enrol staff aged over 22 years old and earning more than £9,440 a year into a pension scheme from your staging date.

The new law for workplace pensions changed in 2012 and is being brought into effect over six years, with the largest UK employers first.  Auto enrolment is being enforced to make it easier for people, especially those on lower incomes, to build up a pension as more and more people are living longer and need to plan for their retirement.

Auto enrolment means that rather than having to actively select and join a pension scheme, employees are being enlisted in one by their employer.  If they choose not to stay within the scheme it is up to them to then opt out.

So what is your business’ staging date? Your staging date is determined by the number of people in the PAYE scheme that you use and is based on the latest data from HM Revenue and Customs held by The Pensions Regulator on 1 April 2012.

By using your PAYE reference, which can be found on your P35 employer annual return, or P30BC payslip booklet, you can find your staging date on The Pensions Regulator interactive tool online – www.thepensionsregulator.gov.uk.  You can, however, postpone auto enrolment for up to three months from your staging date.

Although you have the responsibility to enlist some staff members to your pension scheme, if additional employees, who do not meet the compulsory criteria, ask to be added, you must comply. However, depending on their age and salary your responsibility to pay an employer contribution may differ.

Preparation is everything so once you know your staging date, make sure to set up a pension scheme or modify an existing one, make any necessary changes to your payroll and write to your staff individually to explain how it will affect them.

— Tindles

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