I make no apologies for again coming back to this subject if you have taken no action do it now 45000 will vest in 2015 45000 per month are scheduled to vest in 2016 and even more in 2017.There are major capacity doubts to handle all this the pensions regulator may not be sympathetic and can fine you they may be tolerant if you can show you have started the process .Contact me at firstname.lastname@example.org or on 02036407748 for more help.
The messages below are not mine but present the issues in an easy to understand manner.
Auto Enrolment is all about pensions…. isn’t it?
Many employers and the professionals they work with assume that auto enrolment is all about pensions. The reality is that it’s about a decent bit more than that.
You see broadly speaking auto enrolment tasks fit into three main categories. Pensions, Payroll (or other software which helps payroll comply with auto enrolment) and regulation.
All of these constituent parts interlink as some of the tasks you need to complete fit into more than one category
The key factor here is if employers just attempt to comply with the pension obligations, they won’t comply.
If employers just do the ‘payroll’ and ‘pensions’ element they won’t comply.
Employers and the professionals they work with need to understand that the obligations they have include all three and therefore they need to comply with all of the ‘circles of auto enrolment’.
The tasks not relating just to the ‘pensions bit’ are too numerous to mention however they include calculating who should auto enrolled into a scheme, registering with the regulator, communicating with employees and performing a number of tasks on a regular basis.
So before you think about helping your business be careful you’re considering all the tasks which need to be done instead of just doing the ‘pensions bit’.
Employer’s don’t need to comply… do they?
Let’s give a simple answer to a simple question. Yes they do.
There are a couple of small exemptions (for example sole director businesses where that particular director is the only businesses employee) however the massive majority of employers in the UK will have to comply with the regulation.
A couple of important things to mention in addition to this.
Complying with the regulation isn’t optional. It isn’t something you can decide to do or not. It needs to be complied with in the same way as tax or HR law. Whether you comply or not can be tracked through your PAYE reference number and anyone not complying can (and are) being fined.
Also, auto enrolment regulation is an employer duty. It’s an employer duty to find out what they need to do, when they need to do it and either perform or delegate the tasks associated with doing the job.
That’s why there are employer penalties for not complying.
So….Do employers need to comply.
The answer? With the odd exception almost definitely yes!
You can defer you’re ‘staging date’
This is an interesting one and a rule often misunderstood.
To be clear, if you’re an employer you’re ‘staging date’ is the date you need to ensure you comply with auto enrolment regulation.
There’s an assumption with many employers that you can defer your responsibilities under the new rules by 3 months. This isn’t true…..although there is a valid reason for much of the confusion.
So, let’s clarify. Although you can bring forward you’re ‘staging date’ you can’t put it off.
There are a number of tasks employers have to do by their staging date which cannot be deferred. This includes choosing (& setting up) a qualifying pension scheme, providing the regulator with a point of contact and confirming you need to enrol.
Therefore if you’re an employer waiting until just before a particular employers staging date, with the assumption that you can defer some of the responsibilities, is not the best approach.
However, and this is partially the reason for the confusion, for both for the new and existing employees you need to enrol into a pension scheme, you can decide to delay ‘auto-enrolling’ them for up to three months.
Whilst an employer can defer putting their employees in automatically for three months, employees can choose to opt in early (and in our experience many do) and therefore you need to meet the other duties (including selecting and applying for a pension scheme) by their staging date to ensure that, if you’re an employer, to ensure you meet your regulatory responsibilities.
So, to be clear…
Whilst you can defer auto enrolling the workers who need to be in for up to 3 months….you’ve still got duties and obligations to complete quite a few tasks prior to staging date.
That’s why it is recommended to start to plan and prepare 9 months prior to their staging date.
You can use your existing pension scheme
The answer is possibly… but if you’re an employer you need to check first.
It might be entirely possible you can use your existing scheme to help you comply with the new regulation. However it’s also likely you can’t.
There are a number of checks you need to make with your existing pension provider to confirm it’s suitable to use under the new rules.
These checks include confirming its charges aren’t too high, it has a default pension fund (a fund where your employees don’t have to make an immediate choice in relation
to where the money’s invested) and it allows employees to opt in and out.
So, if you’re an employer using your existing pension scheme might be possible….however the best way to understand whether it can be used or not is to check the pension regulator website (you can find information about qualifying schemes here), consult with a professional who will guide you through the questions you need to ask in order to comply.
I don’t need to worry about auto enrolment… my payroll software/pension provider/software is dealing with all of my obligations
The reality of many of the processes within our businesses, automatic enrolment included, is that we should try to automate as much of what we can as possible. Therefore looking at the software designed to help us do this is a smart move.
However in our experience I’d be cautious about the proclamation that a particular piece of software ‘does it all’.
The reality is that whilst these particular pieces of software support the process of complying with auto enrolment, it’s highly unlikely that your software package ‘does it all’ without human engagement to complete some of the tasks required.
It’s important to remember that the new responsibilities are that of the employer and therefore regardless of what software your business uses it’s absolutely worth understanding what your software packages does, and more importantly, what it doesn’t do so you can fill the gaps.
This means that if you’re an employer, it’s important to use and rely on the software as appropriate, but also understand your obligations under the auto enrolment rules to fill any gaps.
(And an extra special bonus one…)
Once my businesses has staged my obligations are over.
Let’s put this plainly….
Auto enrolment is an ongoing duty.
The obligations under the new regulation will continue for a long time, and if all the commentary is true, will continue to evolve and develop and therefore need keeping an eye on.
To put it more plainly…
Auto Enrolment is for life, not just for ‘staging date’
However the obligations under auto enrolment continue, as is expected, for many years to come but continue to change, how do employers ensure they’re not only complying now but also in the future? And how do employers keep up with the changing legislation?
It’s worth signing up for the pensions regulators newsletter for constant and regular updates or alternatively use tools which ensure that every time a change is made which could potentially have an impact to you or your client businesses.
However as long as employers meet their obligations prior to staging date and continue to comply with auto enrolment regulation making required changes along the way as and when the rules change (and keeping up to date with these rules) they should be fine.
So there it is….
A journey through the top 5 (and a cheeky bonus one) fables in auto enrolment.
Please ensure you take action now if in doubt call or email