What Happens When Auto-Enrolment has Happened and the Workplace Pension has Started?
So far, according to The Pensions Regulator, about 8 million people have been enrolled into a workplace pension by 600,000 companies. That’s great news for them, as they are through all the preparation, set-up, declaration of compliance and implementation. However, it doesn’t end there, because there are on-going duties, and this article looks at some of them.
- As the employer, you’ll need to pay regular contributions into the pension
You need to calculate and pay the employer contributions to your staff’s pension scheme on an ongoing basis. You’ll also need to calculate your staff contributions, make the necessary deductions from payroll and transfer their contributions to the pension scheme.
You’ll have agreed what these rates are and when to pay them with your chosen pension scheme. By law, you and your staff have to make minimum contributions into the scheme. These minimum contribution levels are due to increase in April 2018 and April 2019, as this table shows:
|Date effective||Employer minimum contribution||Staff contribution||Total minimum contribution|
|Current until 5 April 2018||1%||1%||2%|
|6 April 2018 – 5 April 2019||2%||3%||5%|
|6 April 2019 onwards||3%||5%||8%|
- You must monitor the age and earnings of your staff and enrol new eligible staff
You will need to monitor any changes in age and earnings of your staff so that you can identify if they become eligible for automatic enrolment. You’ll also need to check eligibility of any new members of staff on the day they start work.
If, as or when staff members become eligible (for example by turning 22, or by meeting the earnings thresholds), then you are required to put them into a pension scheme and pay contributions to it. Your payroll software should be able to support you with this.
- You must process any requests to join or leave the scheme, and keep and maintain accurate records
When it comes to opt in or joining a scheme, if any of your staff write to you asking to join your workplace pension scheme, you must put them into it within a month of receiving their request. You will have to pay into the pension scheme they are aged outside the age threshold and/or are outside the earnings threshold.
For opting out, if any of your staff choose to leave your pension scheme within one month of being put into it, you need to stop taking money out of their pay and arrange a full refund of what has been paid to date. This must happen within one month of their request.
You also need to keep up-to-date records about your staff, including who you’ve enrolled and when, information about your pension scheme, and the contributions you are paying. These records must be kept for six years, with the exception of requests to leave the pension scheme which must be kept for four years.
- In addition, did you know that you’ll also need to re-enrol eligible staff into an automatic enrolment pension scheme every three years?
Every three years, you’ll need to assess all your staff who either opted out of their workplace pension scheme or have ceased to become members, re-enrol them if they meet certain criteria, write to them to tell them what you’ve done – and then re-declare your compliance to The Pensions Regulator to let them know what you’ve done to meet your duties.
If This Sounds Like a Lot of Work, Talk to Us
You might have spotted that a lot of the on-going work involves payroll. As outsourced payroll providers, we can do all this work, as part of out agreement with you.
Call us on 0121 422 0550 or contact us for an initial chat.