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Jul 2013


Update on Auto Enrolment

Implementing the pension auto enrolment takes about nine months to one year, so it is important to start preparing as soon as possible. It is a statutory process and can not be ignored. There are key staging dates that an employer needs to be aware of (the staging date is when an employer has to start auto enrolling their employees) although it is possible to implement pension auto enrolment before the planned staging date. The employer needs to nominate a contact within the company who will be responsible for implementing the process. Working backward from the staging date the plan should incorporate sufficient time to complete the required processes such as those detailed below as well as developing admin procedures and setting up payroll.

Analyse the existing pension scheme

An existing pension scheme must meet the eligibility laid down by the Pensions Regulator. If no pension scheme is in place then the government NEST scheme may be implemented which has no set up charges.

Assess your workforce

Your workforce should be categorised into eligible jobholders, non-eligible job holders and entitled workers. Eligible jobholders will have to be automatically enrolled. They are aged between 22 and state pension age, have qualifying earnings that trigger automatic enrolment. Non-eligible jobholders are aged between 16-21 or state pension age and 74 and have qualifying earnings that trigger automatic enrolment. Entitled workers have the right to join the pension scheme but do not have qualifying earnings aged between 16 and 74. This should be an annual process once auto enrolment has been implemented.

Communicate with your workforce

Information about pension auto enrolment must be provided to the workers by you the employer in writing. This should preferably be by template letter. You can also decide to provide information sessions to your workforce so they can have their questions answered or you could develop an information booklet (which could be given out during an induction process to new starters).

Inform the Pension Regulator and keep records

You must keep certain records in support of your employer duties that will enable you to demonstrate your on going compliance and you should build these record-keeping requirements into your existing processes. The scheme should be registered with the Pensions Regulator.

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Posted byAnn TigheinAuto EnrolmentPayroll Software