Under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it. This is called automatic enrolment. You firstly need to establish if you do need to provide a work place pension or not. You can do this by checking on www.tpr.gov.uk/onlinetool
There are a few things that you need to do and dates that you need to do them by. The online tool will guide you through as well as providing pension options.
You and your employees will both contribute to the scheme to help them save for retirement. You will need to have a scheme that is set up for automatic enrolment. Ensure the scheme has been independently reviewed or regulated by the Financial Conduct Authority.
If you employee anyone aged from 22 up to pension age and they earn more than £833 per month (£192 per week) you are required to provide a pension scheme. You will need to put your employees into the scheme from their start date and you will need to begin contributing to it from the next payday. Unless you have agreed a different amount with your pension scheme the minimum employee contribution is currently 5%.
This is a legal requirement to explain to your employees how automatic enrolment applies to them. You must do this within six weeks after your employees start date. Here are some handy letter templates to use www.tpr.gov.uk/write-staff
This is your legal duty to report how you have met your requirements. Failure to do so could result in a fine. This is a declaration to show that you have met the criteria required.
If you have carried out an initial assessment and you do not need to provide a pension you still have a duty to write to your staff within 6 weeks of their start date and declare your compliance within five months. Monitor if the situation changes i.e. the employee reaches a salary of more than £833 per month.
You have a legal duty to act straight away. Failure to do so will result legal action and a fine. Use the online tool to complete the assessment. If you have employees who need to be put onto the pension scheme you will need to backdate any missed contributions as well as your employee, unless of course you decide to pay this for them.
The total minimum contribution is 8% to be split between the employer and the employee. You may decide to cover the full 8% or a lesser amount. Once you have chosen which scheme you would like you will be able to decide on the right split for you.
Once you have completed and set up your initial pensions and declared compliance, you still have ongoing duties to your employees.
If you have any questions or need any guidance contact us, we are here to help.