The auto-enrolment clock is ticking…
Article posted: 27th September 2017
Under the Pensions Act 2008, every employer in the UK with at least one employee must put certain staff into a pension scheme and contribute towards it.
But all new businesses that start trading from 1 October 2017 and employ at least one person will need to provide instant pension responsibilities. The Pensions Regulator believes that more than half of these start-ups will need to enrol staff into a workplace pension.
It's essential that businesses do not ignore letters from the Pensions Regulator. There's a very real risk that by putting their heads in the sand, business owners may face significant fines for each day that they are not compliant with auto-enrolment rules. This will far outweigh the maximum costs associated with setting up a scheme.
There is nothing for SME owners to fear. Auto-enrolment is easily dealt with and it's important that owners do not ignore their staging (implementation) date or the 1 October start date if that is when their business launches.
McBrides is currently seeing a range of questions coming through from clients. Some are asking if auto-enrolment applies to them, while others are seeking help about how to set up, and others have questions about how specific employees should be treated under their new scheme.
The Pensions Regulator website is user-friendly and available at www.thepensionsregulator.gov.uk. It's important to seek advice if you aren't sure about auto-enrolment.
Auto-enrolment started in October 2012, and is being rolled out in a staged approach. Businesses with:
- 250 staff or more (large employers) had their staging date set between 1 October 2012 to 1 February 2014
- 50 to 249 staff (medium employers) staged from 1 April 2014 to 1 April 2015
- 5-49 staff (small) and 1-4 staff (micro) became subject to the rules from June 2015.
New businesses that started up after 1 April 2012 were given a staging date from 1 May 2017. This changes for all new businesses launching from 1 October 2017, which have an immediate staging date.
Darren Ryder, the Pensions Regulator's automatic enrolment director, says: "Saving for retirement is becoming the social norm and the success of automatic enrolment is playing a key role in this shift. Our figures show that new businesses will continue this trend as they ensure workers are enrolled into a workplace pension."
Further details about auto-enrolment can be found at: http://www.thepensionsregulator.gov.uk/en/employers.
You can also send questions to McBrides Chartered Accountants on email@example.com.
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