The new auto-enrolment pension obligations for UK companies now apply to start-up businesses from day one.
If you’re setting up a new business and want to ensure compliance, here are eight things you need to know.
- Employers have a duty to identify a pension provider, ensuring that their chosen payroll solution is compatible with their scheme, so staff receive their pension entitlement on time.
- Within five months of taking on staff, employers must complete a declaration of compliance, telling The Pensions Regulator (TPR) how they have met their obligations.
- If employers are late meeting their duties or fail to set up a scheme as soon as they employ staff eligible for a pension, contributions will have to be backdated to when they first employed staff.
- Automatic enrolment is a continual commitment for employers. They must continue to assess staff and keep records.
- Every three years, employers must automatically re-enrol any eligible workers who initially opted out of the workplace pension scheme.
- Business owners must complete a redeclaration of compliance within five months of their re-enrolment date.
- From April 6 2018, it will be a legal requirement for employers to increase their contributions into their staff’s automatic enrolment pension to at least two per cent. Staff contributions will also rise to make up the shortfall to bring the total minimum contribution up to five per cent.
- On April 6 2019, contribution levels will increase further, with employers paying a minimum of three per cent into their pension with staff making up the difference to reach eight per cent contribution.
With TPR securing fines of up to £52,500 from non-compliant companies, it is something that new businesses need to be aware of and be strict with their enforcement.
For more information about pensions, contact Philip Johnson on 01254 688110 or visit http://auto-enrolment.pierce.co.uk/