Pension auto-enrolment can seem very intimidating. We cut through the complications, so you can understand the basics step by step.
- Find out your auto-enrolment date. You should get a brown envelope specifying this. There will be a glut in 2017 as the smaller businesses come on-line. You can find out what your “staging date” is by checking the Pensions Regulator’s website.
- Start getting ready well in advance of this. 6 months is recommended to get the steps below in place.
- Find an eligible scheme. The earlier the better, as providers are already dropping out of the market which is not very attractive to most
- Check your existing pension scheme, if any. Is it good enough to be used in the new regime? This will depend amongst other things on contribution levels, benefit levels, and whether it is actually or effectively opt-in. One of the critical features of auto-enrolment is that pensions should be opt-out.
- Identify relevant “job holders”. You have heard of “employees”, “freelancers”, “workers” and “agency workers”; well now there are also “job holders”. Job holders will include all these, and more. If there is any doubt, take advice!
- Are the job holders eligible? They will need to have a minimum level of earnings, and be at least 22 years old.
- Calculate your contribution levels. This can be complicated because they should be based on “earnings”. Earnings will include salary, wages, commission, bonuses, overtime etc. Payroll will need to know what to do month by month.
- Decide on the 3 month optional waiting period. Job holders will still be able to opt-in during this period.
- Get the right processes in place. For instance, you will need to be able to spot when people become eligible for instance because their type of work changes, or they reach the right age or level of earnings. If they have opted-out, job holders need to be opted back in every 3 years or so.
- Put the right communications in place. These should include informing staff of their right to opt-out.
- Register with the Pensions Regulator. You will need to confirm that you have complied with your auto-enrolment obligations.
- Remember not to encourage any opt-outs, either amongst employees or at the recruitment stage.
Springhouse is able to assist via its trusted partners simply and cost effectively. Please call us should you wish to discuss.