by: Lisa Kennery
The payroll department here at Pierce is equipped to help and advise you, contact us and we’ll guide you through the process.
How much do you know about auto enrolment?
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As larger employers should now be compliant with auto enrolment legislation, the focus is now on SME`s so let’s talk about what auto enrolment means to you and your business.
UK employers are now required to automatically enrol their workers into a workplace pension if they meet certain criteria. Every employer must comply by law, failure to do so could result in penalties. These penalties are shown below:
|No of employees||Daily fine (£)|
Each employer will be provided with a staging date by the pension’s regulator. The staging date will determine when the process should begin for each business. This date can be deferred by using postponement for a maximum of three months, however within this time employees may wish to join the pension scheme so employers must have a scheme in place by their staging date. This date is always the 1st of the month. It can be brought forward.
To find out your staging date please follow this link:
The key requirements for Auto Enrolment
- Setting up a qualifying pension scheme with the contribution level that suits your business
- Assessing your workforce
- Automatically enrolling eligible jobholders
- Communicating with your employees
- Calculating and deducting pension contributions for both employees and employers
- Managing opt ins, opt outs and ongoing assessments of your workforce
- Communicating information to your pension provider
- Record keeping for six years
- Declaration of compliance
For more detailed information on the key requirements please visit our microsite
The time frame recommended to implement auto enrolment is twelve months although this may vary depending on your individual circumstances.
Pension minister Steve Webb has already warned small businesses to start preparing early to avoid the impending capacity crunch. The number of employers staging in a month is to increase dramatically. For example early 2014 approximately 3000 employers staged in a month by February 2016 this will increase to 30,000 per month and by December 2017 134,000.
Involve all parties
From our experience so far the key to successfully implementing auto enrolment is to plan and involve all third parties at the start of the project. It is surprising the variance in questions from a financial advisor to a payroll professional.
Link to your payroll
For payroll it is vital to know the scheme can accept files on the frequency the payroll is currently run on and receive answers to other questions such as, is the business calculating on whole periods or part periods and is the pay reference period defined on tax periods or pay periods. All of which have an impact on how and when the pension calculations are taken.
Can your current payroll software cope with assessing your employees, or will you require middleware software. this may result in having to run the payroll twice which could be a critical point if the turnaround time for your payroll is tight e.g. you pay weekly.
Let us help you
For further guidance whether or not we already process your payroll please contact Lisa Kennery who will answer any questions you may have and will help you through the process.