You’re probably overwhelmed with the sheer amount of different terms that are associated with Auto-enrolment, or workplace pensions. With staging dates, worker eligibility, minimum contributions and so on, it’s very easy to lose track of exactly what to do, let alone what these things mean. You probably have a lot of auto enrolment questions
With that in mind, we’ve put together that should give you clarity when trying to tackle auto enrolment in your business.
Auto enrolment questions: I’ve read about three different definitions about what Auto-enrolment is, and I’m still none the wiser. What is it?
Simply put, Auto-enrolment refers to all UK businesses being required by law to provide workplace pensions to their employees.
This scheme has been in place since 2012 and started with larger businesses, but now it’s the turn of small to medium enterprises to implement new workplace pensions leglislation.
Auto enrolment questions: Why is Auto-enrolment here?
Our workforce is getting older and the government face a pension deficit as a lot of us are not putting enough money into our personal pensions.
Therefore, the government have taken the step to make it mandatory for organisations to contribute towards employees’ pensions.
Auto enrolment questions: Is it against the law if I ignore Auto-enrolment?
In a word, yes. All UK businesses will need to Auto-enrol their eligible staff into a workplace pension. Any company that doesn’t will be subject to enforcement action from The Pensions Regulator, which will include financial penalties.
Auto enrolment questions Okay, so what do I need to do?
The first thing is to find out your staging date and work backwards from and formulate a plan to meet this Auto-enrolment deadline.
Auto enrolment questions: Hold on – what’s a staging date?
A staging date is a day that has been assigned to your company as the time that you need to begin enrolling your staff into a workplace pension scheme. This can be postponed. You can get this date from The Pensions Regulator here. (You’ll need to have your PAYE reference number ready)
Auto enrolment questions: So, are all of my staff entitled to a workplace pension?
No, not necessarily. Only staff who are between the ages of 22 to State Pension Age and earn over £10,000 per annum are eligible for Auto-enrolment.
Anyone who falls outside of this will need to ‘opt in’ or join into your pension scheme. This can get pretty confusing, fairly quickly, so why not check out our section on Auto-enrolment eligibility that can provide you with more details here.
Okay, this is starting to make sense. So I guess that after I get my staging date, I’m finished right? After all, these Auto-enrolment questions make it sound like I don’t have to do much…
It’s only the beginning. The ‘auto’ in Auto-enrolment relates to your employees not having to do anything to be included into your pension scheme.
On the other hand, you need to assess your staff’s age and salaries, choose a pension provider, manage your payroll and communicate changes to your workforce. You also need to complete your declaration of compliance with The Pensions Regulator.
It sounds like a lot, and we won’t lie to you, it is, but we’ve put together a 10 step timeline on how you can stay on top of your Auto-enrolment action plan.
Further, why not find out more about how we’re helping The Counselling Foundation tackle Auto-enrolment in our “A Year in the Life” series.
Auto enrolment questions: How do I select a pension provider?
If you have an online payroll software system like QuickBooks Online, there will be a pre-selected list of pension providers, all of which that meet the compliance requirements of Auto enrolment, including NEST, the government backed provider who have a legal obligation to accept any employer and their employees regardless of size and contribution values. You might have your own pension provider, and if you do, you’ll need to check that it is in line with Auto-enrolment.
Makes sense or still as clear as mud? Hopefully, it’s the former, but if you’re still struggling to understand, why not view our Auto-enrolment mini site for more information on workplace pensions.