Pensions & auto-enrolment

Are you aware of pension auto-enrolment? Do you know when it affects you?

As we have previously reported, the 1st October 2012 was the first staging date for the pension roll out.

Employers with over 120,000 employees had a legal obligation to automatically enroll into a pension scheme and make contributions on behalf of ‘eligible joiners’.

The remaining employers will be notified of a staging date that varies according to the number of PAYE employees:

Employer size (by PAYE scheme size) or other description Automatic Enrolment duty date  
  From To
50 to 249 members 1 April 2014 1 April 2015
30 to 49 members 1 August 2015 1 October 2015
Less than 30 members 1 January 2016 1 April 2017

So what does auto-enrolment entail? Well firstly you need to ensure that you have an auto-enrolment compatible pension scheme up and running. Then there is the legal obligation to write to your employees at certain stages throughout the auto-enrolment process.

Once your staging date arrives you have the opportunity to postpone automatic enrolment for a period up to 12 weeks – this can work well in companies that have a 3 month probation period. However, the employee has a right to request to opt-in to the scheme early and the employer must do this.

Finally when the deferred date arrives you must assess and enroll all employees that meet the criteria of an ‘eligible jobholder’. Those employees that are:

  • aged 22 to state pension age
  • working in the UK
  • earning over £10,000 a year

The employer and employee must then pay a minimum of the statutory amount as detailed below:

Dates Employer Minimum contribution Employee Minimum contribution Total
1st October 2012 to 30th September 2017 1% 1% 2%
1st October 2017 to 30th September 2018 2% 3% 5%
1st October 2018 onwards 3% 5% 8%

 

We have vast experience in this area as we have already worked with a number of clients to support them through this process.

If you want to know your staging date please contact us with your PAYE reference number and we can find out for you.

For any more information or assistance please call us on 01925 626253.