What is auto enrolment?
Workplace pensions have changed and employers with at least one employee now need to be aware of their duties under Auto Enrolment.
Your staff will be automatically enrolled to a pension scheme in the majority of cases and will have to “opt out” if they do not wish to contribute.
Employers will need to pay a percentage of the pension contribution. We have put together some information on how much you will need to contribute and when you will need to start thinking about the scheme.
Staging Date
The staging date is the date automatic enrolment duties come into effect for the employer. They are likely to be sometime in 2016 or 2017. However you can find your start date online here:
http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx
Point of contact
Each company must provide a point of contact.
Who needs to enrol?
1 Has a right to join a pension scheme
If they ask you to, you must provide a pension scheme for them, but you don’t have to pay contributions.
2 Has a right to opt in
If they ask to be put into a pension scheme, you must put them in your automatic enrolment pension scheme and pay regular contributions.
3 Automatically enrol
You must put these members of staff in your automatic enrolment pension scheme and pay regular contributions. You don’t need to ask their permission. If they give notice, or you give them notice, to leave employment before you have completed this process, you have a choice whether to automatically enrol them or not.
Potential Opt out
Automatic enrolment duties don’t apply when a company or individual are not considered an employer. You won’t have any duties if you meet one of the following criteria:
- you’re a sole director company, with no other staff
- your company has a number of directors, none of whom has an employment contract
- your company has a number of directors, only one of whom has an employment contract
- your company has ceased trading
- your company has gone into liquidation
- your company has been dissolved
How much is paid?
The minimum total contribution to the scheme is usually based on ‘qualifying earnings’. These are gross earnings from employment that fall between the lower and upper earnings limit.
Please contact us if you would like more information on auto enrolment and how it impacts on your business.
