On Monday 1st June automatic enrolment will kick in for employers with fewer than 30 people on their payroll.
The exact staging date for an employer will be between 1 June 2015 and 1 April 2017, depending on their PAYE reference. Employers who do not have a PAYE reference should have a staging date of 1 April 2017. Between January 2016 and March 2018, employer numbers hitting their staging date will be averaging over 100,000 a quarter, hitting over 200,000 in the first few months of 2017.
Even employers with one employee are affected. What should employers do? Hargreaves Lansdown’s 5 point plan. Nathan Long – Head of Corporate Pension Research at Hargreaves Lansdown; ‘Auto-enrolment faces its biggest test yet. Gone are the well resourced HR and Finance teams of larger businesses. Now employers with fewer than 30 staff take centre stage. Preparation is the key to success. Employers must start planning early, find out when auto-enrolment applies to them and speak to their payroll and pension providers.’
What employers should do:
Check when auto-enrolment applies for them – use the tool on the Pensions Regulator website. Understand what they need to do. This includes who they need to enrol into the company pension, how much they must pay in, when they need to do this and what they need to say to their staff. A great starting point is the Pension Regulator website which is home to a whole host of information and tips. The company pension provider may also have some information that may help.
Speak to the payroll provider. An external payroll provider is likely to have been through this process and could be a great source of help. Their system may also have some quirks which could influence what decisions are made.
Decide how much to pay in. There are four different compliant contribution structures allowing for payments based on basic pay or total earnings; employers can choose which best suits their business.
Pick a pension plan. If a company pension is already in place the provider will have to agree it can be used for auto-enrolment. If no plan is in place there are plenty to choose from, including NEST (National Employment Savings Trust) which must accept any employer.