What are the implications?
As many employers are all too painfully aware, Pension Auto Enrolment is here to stay and every employer with at least one member of staff will be required by law to provide a workplace pension.
The first stage in the process involves you receiving a letter from the Pensions Regulator advising you of your Staging Date – this is the date by which you must have your Pension Scheme in place and be ready for employees to be enrolled into. If you have yet to receive a letter, do not worry – it will arrive soon enough! If you cannot wait to find out your Staging Date then you can check by visiting The Pensions Regulator’s website – www.thepensionsregulator.gov.uk. And if you are really keen, there is also a host of information available on this website to assist in understanding your duties as an employer.
Once you are advised of your Staging Date the next big issue for you to consider is “which pension scheme should I choose?”
If your business has yet to set up a scheme then you may find that options for the smaller employer are more restricted and may not include larger pension companies. This is because many pension companies have elected to avoid the hassle of administering smaller schemes – or seek to charge a larger than average fee to do so.
” Once you are advised of your Staging Date the next big issue for you to consider is which pension scheme should I choose? “
There are however several companies on the market that will provide a compliant and easy-to-manage scheme for the smaller employer to consider.
NOW Pensions – www.nowpensions.com – set up is easy and they manage much of the paperwork for you and meet the minimum contribution regulations. All employees must have an e-mail address in order to register themselves with NOW Pensions to be able to manage their own Pension Fund once this is up and running.
NEST – www.nestpensions.org.uk – this was set up by the Government specifically for auto enrolment. Again easy to set up, however, these schemes are self administered so there is more paperwork for you to send out and follow up.
The People’s Pension – www.thepeoplespension.co.uk – very similar to the above schemes.
Now to the key question – how much must you contribute? Below is a guide showing the minimum contributions and how these will rise over the coming years.
Additionally, most pension providers are starting to make a charge for management/administration of the pensions that they provide.
After all that, you then need systems in place to administer the scheme properly – which may involve investing in compliant payroll software or possibly outsourcing your payroll function for peace of mind.