Over my recent blog posts, I’ve hopefully given some insight and easy-to-follow guidance on how to ensure you’re fully compliant with Auto Enrolment before final deadlines pass this autumn – it should all seem much less daunting now!
But before you skip off into the sunset, happy that you’ve satisfied every legality in plenty of time before your staging date deadline, it’s worth having a think about your continuing responsibilities in administering your Auto Enrolment pension scheme longer-term, and making them part of your regular to-do list.
All’s well that ends well… but this is only just the start
So you’ve followed all the steps outlined in my previous blogs, finishing off with registering your full compliance with The Pensions Regulator, and you’re feeling pretty pleased with yourself. What you need to do now is put longer-term processes in place to ensure you:
(a) are making the requisite regular contributions to your chosen pension scheme;
(b) remain compliant.
Contributing to your employees’ pensions
Starting on your staging date, as an employer you must calculate and pay contributions to your chosen scheme for each participating employee. The amount you pay will depend on your scheme and provider, but there are minimum contribution rates set out by law. These are being phased in gradually up to 2019, when the minimum contribution to a pension scheme will sit at 8% of an employee’s earnings. You must pay at least 3% of this, but can choose to pay a higher percentage, meaning your members of staff pay less – that’s entirely up to you.
This table summarises:
|Date Effective||Employer minimum contribution||Staff contribution||Total minimum contribution|
|Currently until 5 April 2018||1%||1%||2%|
|6 April 2018 to 5 April 2019||2%||3%||5%|
|6 April 2019 onwards||3%||5%||8%|
Remember, as well as regular pension contribution costs, you may need to budget for things like administration fees payable to your pension provider – not all of them charge these, but it’s worth checking it out.
Start as you mean to go on
As well as keeping on top of employer pension contributions, you also need to put in place effective processes to:
- Monitor the ongoing eligibility of your workforce: the categories everyone fell into at your staging date will change as staff members’ circumstances change. Review your whole workforce on a regular basis so you’re not caught out.
- Keep up-to-date requisite records – see my previous blog.
- Keep an eye on your pension scheme to check it continues to qualify as suitable for Auto Enrolment.
- Process opt-ins and opt-outs as requested by your staff. An employee can opt out within a month of enrolling, and will need a refund of any contributions they have made.
All of these ought to become ‘business as usual’ for your company, dealt with alongside other regular payroll administration, ensuring a real fairy-tale ending to your Auto Enrolment story.
But every good story deserves re-telling!
Just when you thought you’d turned the final page, I’m afraid you are required to repeat the Auto Enrolment process every three years. You can nominate the date as long as it falls within a 6-month period around the 3-year anniversary of your original staging date. Get it in the diary now so it doesn’t creep up on you!
The following websites might be helpful in providing guidance on suitable pension schemes, and the Auto Enrolment process:
|The Pensions Regulator||www.thepensionsregulator.gov.uk|
|Money Advice Service||www.moneyadviceservice.org.uk|
|The Pensions Advisory Service||www.pensionadvisoryservice.org.uk|
|The National Association of Pension Funds||www.napf.co.uk|
To search for a financial adviser or a financial planner, try www.unbiased.co.uk
Or for a real fairy godmother providing friendly, personal, tailored advice on Auto Enrolment and how it fits into your business’ payroll processes, get in touch with Cashtrak.
We don’t have a magic wand, but we’d be happy to clear up any confusions you have, or provide a no-obligation quote for the services we offer, smoothing your way to your Happily Ever After.