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Pensions auto-enrolment – a reminder

SUMMARY: Pensions auto-enrolment – don’t let it take you by surprise.

The provisions in relation to the requirement to automatically enrol workers into workplace pension schemes under the auto-enrolment regime came into force in June 2012.  The new duties are being implemented month by month over a five and a half year staging period that started on 1 October 2012.

Staging dates

Organisations have different staging dates, depending partially on the size of the business.  For some businesses, their staging date will not be until 2017. Larger employers passed their staging dates first. However, for many businesses the staging date is in 2014, 2015 or 2016.

As a guide, the position is as follows:

If you are unsure of your staging date, it is important to check this.  Most businesses will be able to check their staging date by entering their PAYE reference into a staging date tool on The Pensions Regulator’s website.

There is useful information about the staging date on this webpage: http://www.thepensionsregulator.gov.uk/employers/what-is-my-staging-date.aspx#s9429

Contributions

After the staging date, an employer must contribute to its chosen pension scheme on behalf of its workers.  The minimum level of pension contributions that both the employer and worker will have to make will be phased in, increasing to allow time for adjustment.  For example, for employers in the case of money purchase schemes this will be from 1% to 3% with full contributions  having to be paid from 1 October 2018.

Existing schemes

An employer who already has existing pension arrangements in place for some or all of its staff must not assume that those arrangements satisfy its duties under the new regime. Some common areas that will need to be reviewed are waiting period rules, eligibility conditions linked to status or pay thresholds or contribution rules.  If changes are to be made to existing arrangements so that they satisfy the qualifying criteria the processes for doing so will need to be built into the implementation timetable, which may involve consultation with its existing members.

Seek advice

A deliberate failure to comply with the auto-enrolment requirements is a criminal offence punishable by a fine or imprisonment, for which individual directors and other company officers can be held liable.

Employers should not delay and should seek advice from a financial adviser to decide what the most appropriate arrangements are and whether current arrangements can be used.

Contact Details

For more details about these changes please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice. 

Updated: by FG Solicitors
Call us on:  0808 172 93 22

PENSIONS AUTO-ENROLMENT € A REMINDER

SUMMARY: Pensions auto-enrolment – don’t let it take you by surprise.

The provisions in relation to the requirement to automatically enrol workers into workplace pension schemes under the auto-enrolment regime came into force in June 2012.  The new duties are being implemented month by month over a five and a half year staging period that started on 1 October 2012.

Staging dates

Organisations have different staging dates, depending partially on the size of the business.  For some businesses, their staging date will not be until 2017. Larger employers passed their staging dates first. However, for many businesses the staging date is in 2014, 2015 or 2016.

As a guide, the position is as follows:

  • Between 50 and 249 employees: staging dates between 1 April 2014 and 1 April 2015.
  • Fewer than 50 employees: staging dates between 1 June 2015 and 1 April 2017.
  • New employers set up between 1 April 2012 and 30 September 2017: staging dates between 1 May 2017 and 1 February 2018.

If you are unsure of your staging date, it is important to check this.  Most businesses will be able to check their staging date by entering their PAYE reference into a staging date tool on The Pensions Regulator’s website.

There is useful information about the staging date on this webpage: http://www.thepensionsregulator.gov.uk/employers/what-is-my-staging-date.aspx#s9429

Contributions

After the staging date, an employer must contribute to its chosen pension scheme on behalf of its workers.  The minimum level of pension contributions that both the employer and worker will have to make will be phased in, increasing to allow time for adjustment.  For example, for employers in the case of money purchase schemes this will be from 1% to 3% with full contributions  having to be paid from 1 October 2018.

Existing schemes

An employer who already has existing pension arrangements in place for some or all of its staff must not assume that those arrangements satisfy its duties under the new regime. Some common areas that will need to be reviewed are waiting period rules, eligibility conditions linked to status or pay thresholds or contribution rules.  If changes are to be made to existing arrangements so that they satisfy the qualifying criteria the processes for doing so will need to be built into the implementation timetable, which may involve consultation with its existing members.

Seek advice

A deliberate failure to comply with the auto-enrolment requirements is a criminal offence punishable by a fine or imprisonment, for which individual directors and other company officers can be held liable.

Employers should not delay and should seek advice from a financial adviser to decide what the most appropriate arrangements are and whether current arrangements can be used.

Contact Details

For more details about these changes please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.