Affecting every employer in the UK, Auto Enrolment requires employers not only to set up and contribute to employees pensions, but also to comply with a whole new set of legislation. This new legislation, the most radical change to the UK pension system in our lifetime, is designed to tackle the double difficulties arising from increased life expectancy and low pension savings.
To meet their duties employers will have to:
- Know their staging date.
- Assess their workforce – identify and categorise employees.
- Review existing pension schemes to see if they meet the new requirements.
- Communicate with workers in line with obligations.
- Automatically enrol eligible job holders.
- Manage opt-ins.
- Manage opt-outs.
- Make required contributions for and on behalf of jobholders.
- Make arrangements for any “entitled workers” who want to join a pension scheme to do so.
- Keep records and provide information to the Pension Regulator if asked to do so.
Whilst the legislation is well intended, as you can see from the above, it is complicated and potentially onerous for employers!
With potential daily fines of up £10,000 for getting it wrong or failing to comply, employers need to act now.
In the next few years a staggering 1.4 million pension schemes will need to be created with 8.8 million employees needing to be auto enrolled. The pension industry is struggling to cope with this demand and already we are seeing providers being selective about which schemes they want to act for.
It is critical to start the planning process as early as possible (we would recommend at least six to nine months in advance of your staging date).
For further information on pensions and auto enrolment please contact Antony Keen on email@example.com or 01254 679138.