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After your staging date and ongoing activities

Posted by: edwinsmith on August 4th, 2014

Declaration to the Pensions Regulator

You will need to make an online declaration of compliance (registration) to the regulator about how you've complied with your employer duties within five calendar months of your staging date. This is a legal requirement to submit this information and therefore you may face enforcement action and incur a fine if you do not provide the information required.

You will need to provide information like the details of the pension scheme you've used for automatic enrolment and how many people you've automatically enrolled into it. Even if you haven't automatically enrolled anyone, you'll still need to complete a declaration.

If your declaration deadline falls on a Saturday, Sunday or public holiday, you can provide your declaration on the next working day.

Maintain records

Certain records must be kept about your staff and about the pension scheme. Some of these will be kept by the pension scheme, some must be kept by the employer. These include:

  1. Names and addresses of staff you've automatically enrolled.
  2. The contributions payable to the pension scheme and when they were paid.
  3. Any opt-in or opt-out notices you receive.
  4. Name and address of the pension scheme.
  5. Employer pension scheme reference or pension scheme registry number.

Keeping records is good governance and is proof that you've carried out your duties.  It is important that you know what these records are and where to get them from as you may be asked to produce them in the future.  You should therefore decide in advance how to store them so they can be easily accessed.  These records must be kept for a specified time, which in most cases is six years.

Ongoing tasks

Once your employees have been automatically enrolled, the following activities will become part of your normal regular business operations:

  1. Deducting and paying contributions into the pensions scheme.
  2. Processing opt outs promptly (where applicable).
  3. Processing opt-in requests promptly if an employee chooses to join the pension scheme.
  4. Assessing and enrolling new starters if they are eligible for the scheme.
  5. Monitoring existing employees’ age and earnings to ensure that any changes which affect their eligibility are appropriately dealt with.  A table of the main categories of worker and their entitlement can be found on our publications page.

This is the final installment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan. Previous installments detailed below:

1         Know your staging date

2         -

3         - Develop an initial plan

4         - Know your workforce

5         -Check processes and software

6         - Review your pension arrangements

7         -Communicate to staff

8         -On or just after your staging date

9         -How to automatically enrol your staff

For more information on pensions or to discuss your auto enrolment action plan please contact us .  

 

Auto enrolment – how to automatically enrol your staff

Posted by: edwinsmith on July 28th, 2014

In order to automatically enrol your staff into the pension scheme, you'll need to provide the scheme with whatever information they need to get their membership up and running.

As a minimum, you’ll need to provide the following information for each staff member to set up the membership

  1. -        name,
  2. -        postal address,
  3. -        date of birth
  4. -        and National Insurance number

Your pension scheme provider should tell you what additional information they will need in order to make en employee an active member and you will need to provide this information to them in writing, which can include email.

If you are automatically enrolling a lot of staff at the same time (at staging or after postponement), it may take the provider longer than usual to make all of them active members, so it would be a good idea to find out how long the provider expects to take creating active membership for your staff after you have given them the information they need.

Before you staging date you should agree with the pension provider the contributions rates and the due dates for payment of contributions.  Information on the minimum contributions and due dates for payment can be found at on the Pensions Regulator website

You will also need to find out whether the pension deductions should be made from the employees’ gross or net pay (this will vary depending on the pension scheme provider).

You should also discuss with the provider how they handle ‘opt-outs’ (including how an employee can obtain the opt-out notice), and what the provider will need from you in order to process ‘opt-ins’ and joiners to the scheme.

You'll need to assess the ages and earnings of each member of staff on your staging date and you will have 6 weeks to automatically enrol anyone who’s eligible (or 1 month from the end of the postponement period, if applicable)

Active scheme membership must take effect from the date they first became eligible for automatic enrolment.  This means that contributions will be due and you must calculate them from that date. Before the end of the six week period after staff first become eligible for automatic enrolment, you must write to everyone you have automatically enrolled about the scheme, the contribution rates and about their right to opt out.

Tips:

  1. You must not say or do anything that could be viewed as influencing any of your staff to opt out of your pension scheme. This is referred to as 'inducement' which is a breach of the law and could result in fines.
  2. It’s important your staff records are up to date – make sure you hold all their latest information. You should carry out this data check as part of your general preparations for automatic enrolment.
  3. Keep records of who you've enrolled as you will need to make a declaration to the Pensions Regulator on how many you've enrolled into which scheme.

This is the ninth installment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan. Previous installments detailed below:

1 – Know your staging date

2 -

3 -

4 –

5-

6-

7-

8-

For more information on pensions or to discuss your auto enrolment action plan please contact us.

 

 

Auto enrolment -on or just after your staging date

Posted by: edwinsmith on July 21st, 2014

Your staging date is when the automatic enrolment duties come into force for your business.  On this date you must assess your workforce in order to know which staff must be automatically enrolled and which staff have a right to opt in or join your pension scheme. By this stage, you should have the necessary systems in place to generate this information automatically.

It is possible to use postponement on your staging date to delay automatic enrolment for some or all staff for up to three months. This means you won’t need to assess them to identify what duties you have for them until the last day of the postponement period, at which point you must automatically enrol any who are eligible.

You will also need to make a declaration to the pensions regulator taking account of everyone who worked for you on your staging date. The declaration will include details of how many people were automatically enrolled, how many were already in an existing pension scheme you provide, and what you did for anyone else in your employment. You’ll still need to complete your declaration even if you didn’t have to automatically enrol any of your staff.

At staging or when postponement ends, your key duties are to:

  1. Automatically enrol all staff who are eligible and make them active members of your pension scheme – you have 6 weeks from your staging date (or the day after postponement) to do this.
  2. Write to each member of staff to tell them how automatic enrolment affects them, or that you have postponed them – you have 1 month from your staging date to do this.
  3. Submit a declaration online to tell the pensions regulator how you’ve complied with your duties – you have 5 months from your staging date to do this.

This is the eighth installment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan. Previous installments detailed below:

1 – Know your staging date

2 -

3 -

4 –

5-

6-

7-

 For more information on pensions or to discuss your auto enrolment action plan please contact us.

 

Communicate with staff

Posted by: edwinsmith on June 27th, 2014

It is a legal requirement for employers to write to each member of staff to tell them how automatic enrolment affects them and about their rights. Our publications page includes a summary of the information that should be communicated the each category of staff member.

The Pensions Regulator have published a letter template tool to assist with this task.  The tool can be accessed at http://www.thepensionsregulator.gov.uk/employers/letter-templates-for-employers.aspx

Once you know that you have staff to automatically enrol, you must send their details to your pension scheme to ensure active membership. Then you must write to these staff to tell them they’ve been automatically enrolled and that they have a right to opt out of the pension scheme – this must happened within six weeks of your staging date. Please see our previous article on how to find out your staging date.

Once your staging date has passed and your existing employees have been automatically enrolled, you must write to any new employees within six weeks of the day a new staff member joins or becomes eligible to be automatically enrolled.

The exception is for existing scheme members who must be contacted within two months.

The letters may be sent to staff by post or email, but the information must be sent in writing and must be sent individually. A third party such as an accountant or financial adviser may send the letters on the employers behalf, but it remains the employers responsibility to make sure the right information gets to the right member of staff at the right time.

To see The Pensions Regulators full guidance on providing information to employees click here

This is the seventh instalment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan. Previous instalments detailed below:

1 – Know your staging date

2 -

3 -

4 –

5-

6-

For more information on pensions or to discuss your auto enrolment action plan please contact us.

 

 

Filed under: Auto enrolment, Business

Review your pension arrangements

Posted by: edwinsmith on June 14th, 2014

Once you have carried out an initial assessment of your staff you will know which employees are eligible for auto enrolment.

If you have staff to auto enrol you will need to ensure that you have an appropriate pension scheme in place and then agree with your pension scheme provider what information they will need from you and when you will need to deliver it, in order to auto enrol your staff on time.

If you already have a pension scheme

You will need to ensure that it meets the criteria of an auto enrolment scheme.  You should also check that the scheme is good quality, for example it provides value for money and protects your staff’s savings. Click here for The Pensions Regulators guide on selecting a good quality pension scheme.

If you operate a defined benefit pension scheme you should contact the trustees to check whether your scheme qualifies.

If you operate a defined contribution pension scheme it may be used if it meets the criteria regarding minimum levels of contribution.  There are two main ways to check if a scheme may be used:

  1.  if it requires minimum contributions based on qualifying earnings, or
  2.  the employer self-certifies that it requires contributions in accordance with one of three sets of contributions.

For more detailed guidance on the above criteria and to see how the criteria apply to occupational pension schemes and personal pension schemes, The Pensions Regulator have published a tool on their website.Click here to launch the DC Qualifying schemes tool.

If your scheme qualifies or you are able to certify, you can continue to use it for existing members. If you want to use the scheme to automatically enrol your eligible jobholders from your staging date, then the scheme also needs to meet the automatic enrolment criteria.

To be used for automatic enrolment, the scheme:

  1. must not require the worker's consent to join
  2. must not require the worker to provide any information or make any choices to join or remain a member, eg submit an application form or choose a type of fund
  3. must allow a worker to join it from their first day of employment.

If your scheme doesn't qualify, or if it qualifies but doesn't meet the automatic enrolment criteria, it may be possible to amend the terms of the policy. To explore this option, contact your scheme provider.

If you do not have a qualifying scheme

If you can't amend the terms of the policy or you do not have a qualifying scheme, you will need to choose a new scheme that can be used for automatic enrolment from your staging date.

A financial advisor can assist you with finding a pension scheme provider.  When making enquiries and choosing a provider, you should consider the legal requirements of auto enrolment and the quality of the scheme.  Click here to see The Pensions Regulator advice on finding a provider including a list of questions to ask potential providers

It is important that the scheme you choose delivers good outcomes for its members. Click here for The Pensions Regulators guide on selecting a good quality pension scheme.

This is the sixth instalment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan. Previous instalments detailed below:

1 – Know your staging date

2 -

3 -

4 –

5-

For more information on pensions or to discuss your auto enrolment action plan please contact us.

 

Filed under: Auto enrolment, Business

Auto enrolment – Check processes and software

Posted by: edwinsmith on May 19th, 2014

Before the staging date, employers must ensure that their computer systems will support and carry out the tasks required for auto enrolment including.

    1. deducting and paying contributions to the scheme
    2. monitoring the ages and earnings of your staff
    3. handling requests to join the pension scheme from members of staff who haven't been automatically enrolled.

If your existing payroll software does not support all the necessary requirements, the pension provider may provide certain services. Employers should contact their software and pension providers in order to understand which requirements will be supported.  Alternatively, employers may need to purchase a middleware software package to integrate into their current system.

The Pensions Regulator has produced a detailed guide on the questions employers should ask their software provider at www.thepensionsregulator.gov.uk/employers/business-software.aspx

Once the systems are in place, employers should allow time to:

    1. test the systems and ensure they perform the required functions
    2. ensure all staff records are up to date so the information entered will produce an accurate report.

This is the fifth installment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan. Previous installments detailed below:

1 – Know your staging date

2 -

3 –

4 –

For more information on pensions or for help making an initial plan please contact us.

Auto enrolment – Know your workforce

Posted by: edwinsmith on May 12th, 2014

Your duties for each staff member will depend on their age and how much they earn.  It is important to understand in plenty of time which staff you will need to auto enroll.  The Pensions Regulator advises that you carry out an initial assessment of your workforce ahead of your staging date to understand your responsibilities before performing the formal assessment on your staging date

You will need to assess your staff into categories.  Those employees aged between 22 and state pension age and earning over £10,000 per year should be automatically enrolled into a pension scheme and you will need to make contributions towards it. Employees of different ages and salaries have the right to opt in to your automatic enrolment pension scheme or to join a pension scheme after your staging date.  The table below shows the rights of each staff category:

   

Age

   

16-21

22-state pension age

State pension age -74

Annual earnings
(2013-2014)

£5,772 or below

Has a right to join a pension scheme

Over £5,772 to £10,000

Has a right to opt in

Over £10,000

Has a right to opt in

Automatically enrol

Has a right to opt in

The Pensions Regulator website contains more detailed guidance regarding changes in age and earnings, staff working outside the UK and contractors/agency staff at www.thepensionsregulator.gov.uk/employers/know-your-workforce.aspx

Employees have the right to opt out of automatic enrollment, but you must not encourage staff to opt out – this is known as ‘inducement’ and there are safeguards in place to prevent employers from doing so.

This is the fourth installment in a series of articles regarding auto enrolment as detailed on our Employer Action Plan. Previous installments detailed below:

1 – Know your staging date

2 -

3 -

For more information on pensions or for help making an initial plan please contact us.

 

Auto Enrolment – Develop an initial plan

Posted by: edwinsmith on April 30th, 2014

Once an employer knows their staging date, it is a good idea to develop an initial plan in order to understand the preparation tasks which must be carried out, when the tasks should be completed and who will implement them.

To save time and the ensure the registration deadline is not missed, employers can also log in to automatic enrolment registration online and start providing some of the information required as and when it is received.  Such as the name and address of the employer, the PAYE reference number, pension scheme reference and the address.

In order to be fully prepared for auto enrolment, employers must complete a number of tasks, including:

  1. Assessing the workforce
  2. Reviewing internal processes and testing software to ensure it will support automatic enrolment
  3. Reviewing existing pension arrangements and setting up a scheme if necessary
  4. Communicating with staff on how they will be affected by auto enrolment.

The time required to complete each task will vary depending on the size of the workforce and the existing arrangements that are in place.  Scheduling a target date for the completion of each task will ensure that employers allow sufficient time to be fully prepared for auto enrolment before their staging date.

Employers will need to involve key people in the planning process, such as the person who runs payroll, your HR administrator and your accountant as they will be carrying out some of the day-to-day activities once automatic enrolment is up and running.

The Pensions Regulator have produced a quick guide to preparing for automatic enrolment (PDF, 12 pages) leaflet summarising the preparations needed and to help develop initial plans.

This is the third installment in a series of articles regarding auto enrolment as detailed  on our Employer Action Plan. Previous installments detailed below:

1 – Know your staging date

2 -

For more information on pensions or for help making an initial plan please contact us.