24 January 2017

Automatic enrolment Q&A

Do you know what you need to do if youemploy at least one member of staff?
As an employer, you will have automatic enrolment duties to meet, even if youonly employ one member of staff. If yourstaff meet certain criteria, you will have to set up a pension scheme for them,enrol them into as pension scheme, and make contributions to it. You will alsoneed to write to your staff to explain this to them, and submit a declarationof compliance to The Pensions Regulator to confirm that you have met yourduties.

To find out what you need to do and by when, complete the duties checkeravailable on The Pensions Regulator's website

Do you know which of your staff members youwill need to put into a pension scheme?

You need to assess all your staff in order to work out what you need to do for each of them, and whether you needto put any of them into a pension scheme and make contributions to it. Thiswill depend on their age and how much they earn. Even if you employ short-term,seasonal, temporary staff or other staff who are not on regular hours orincomes (for example; care workers, fruit pickers, IT contractors orlabourers), the legal duties will apply to you.

The Pensions Regulator has a stepby step online guide which will help you to ensure that you complete thetasks relevant to you.

Have you checked if your existing pensionscheme can be used for automatic enrolment?

Don't assume that just because you have an existingpension scheme in place (for example, a stakeholder pension) that you will beable to use it to comply with your automatic enrolment duties.

If you want to use your existing scheme,ask the provider if it can be used for your automatic enrolment duties. If youcan't use it, you'll need to choose a new scheme to meet your automaticenrolment duties.

The Pensions Regulator hasinformation on their website to helpyou to choose a pension scheme.

Needto choose a pension scheme?

If you have staff who mustbe put into a pension scheme, then you'll need to have a pension scheme inplace that is set up for automatic enrolment. You'll need to find a schemeyourself or get help from your accountant or a financial adviser.

The Pensions Regulator has guidance andsupport available to help you to choosethe scheme that is right for your staff.

Whatcosts can I expect to incur in setting up a pension scheme for automaticenrolment?

There are some pension schemes aimed atsmall employers that do not have set up or monthly charges for automaticenrolment, while other schemes may charge. It is important that you weigh upthe costs and charges for both you and your staff against the level of servicesthat the scheme will provide some of the services may make running automaticenrolment easier for you over the long term.

The Pensions Regulator has guidance to helpyou understand the costs involved.

Automaticenrolment: Can payroll software help with automatic enrolment?

Many payroll providers already provide amodule or an add-on for automatic enrolment that will help you to work out whoto put into a pension scheme, which earnings to assess, and how much you and eachmember of staff needs to pay into the scheme. Payroll software can help withyour ongoing duties such as monitoring age/earnings of existing staff, andenrolling/writing to them as needed, as well as assessing new starters andprocessing leavers.

Don't risk a fine make sure you file yourDeclaration of Compliance correctly

Every employer mustcomplete a declaration of compliance within five months of their staging date.Although the declaration can be completed on their behalf by someone else (suchas an accountant, a financial adviser or member of staff), it is still theemployer's legal responsibility to ensure that it's completed correctly and ontime. Some employers have become non-compliant after failing to complete theirdeclaration in full. The Pensions Regulator will send you confirmation when thedeclaration has been completed.

Don't leave startingyour declaration of compliance until the last day you can save your progressand return at a later date. Clickhere to access the automatic enrolment declaration.

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