Auto Enrolment News
By April 2017 all employers must automatically enrol employees into a qualifying pension scheme and make contributions on their behalf to that scheme. The minimum non-contributory employer rate starts at 2% but will rise to 8% over the next three years.
The scheme affects any employee who is not already in a pension scheme, who is aged between 22 and state pension age, who earns more that £10k a year for 2015-2016 and who ordinarily works in the UK.
Employees have some control however, and can opt out of the scheme – for example older employees may have already made their own pension arrangements, but there are specific criteria that must be met.
Government research suggests that around 12% of eligible employees will opt out, but companies must offer the opportunity for all eligible employees who have opted-out to re-enrol every three years.
The Pensions Regulator will be informing you of your ‘Staging Date’ and what your responsibilities are as an employer and what you must do and when. You must think about this now if you haven’t already and allow yourself at least 6 months to get everything in place in time. According to a recent survey 1 in 10 SMEs plan to ignore auto-enrolment completely whilst 11% of small business owners are still unaware of what auto-enrolment even is.
If you do not already have a pension scheme in place, you must first choose a pension scheme. Once you have a suitable scheme in place you must inform your payroll provider.
Highland Payroll Services can assist by providing the following:-
- Assess all workers each time we process the payroll
- Auto Enrol them into the pension scheme if and when they are eligible
- Make the necessary deductions from payroll
- Provide pension reports
- Provide the payroll file to submit to the pension provider
- Provide correspondence letters for new joiners
For details on how we can help you and our pricing click here
We cannot stress enough how important it is for you to think about your workplace pension duties as an employer now.