Workplace pension legislation has changed. Pensions Auto Enrolment will have an effect on any business in the UK that employs staff, whether it’s just 1 person or 1000. Starting from October 2012, and phasing in depending on the size of the employer, all eligible workers will need to be automatically enrolled into a Qualifying Workplace Pension Scheme with mandatory minimum contributions from the employer and the employee.

If you don’t have a pension at present, you should look in to getting one. If you have an existing scheme you should make sure you get it reviewed to check it is compliant with the new regulations. However, there is a lot more to Auto Enrolment than setting up a pension. It is essential to be prepared, to ensure the changes required to systems are identified and all parties, including HR and payroll, fully understand what is required of them. It is important to fully understand your duties associated with these new laws, as they could be potentially time consuming, complex to manage and costly to administer.

Through our Adviser members we can help you with all the regulatory requirements of Auto Enrolment as well as the administration burden the new legislation will place on your business.

People are not saving enough for retirement. Too many people are dependent on the state for funding in retirement and the number one reason is cost. The Government can no longer fund state pensions throughout life.
Auto Enrolment commenced in October 2012. However, to help businesses prepare for the administration changes and costs it is being introduced in stages. By September 2016, all employers will be required to auto enrol their employees into a qualifying scheme. This known as a business’s “staging date”
All employers will be required to do the following on a monthly basis:

  • Access eligibility of all employees
  • Register with the regulator
  • Ensure that their pension schemes comply with all regulations
  • Manage the enrolment process for all employees
  • Manage and update the opting in and out of employees
  • Manage contributions
  • Ensure that inducements to opt out are not offered
  • Provide regular updates and employee communications
  • Re-enroll opted out employees on a regular basis
  • Keep accurate records of all the above
If you do not comply, the following consequences will apply:

“wake up call” fine of £400

For persistent offenders, penalties are on a sliding scale based on employee numbers.

5-49 employees up to £500 per day
50-249 employees up to £2,500 per day
250- 499 employees up £5,000 per day

The Pensions Regulator recommends that you should begin planning for Auto Enrolment at least 12 months from your staging date. The earlier you get started the less disruption there will be to your business.

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