Auto Enrolment and Workplace Pensions

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The Financial Conduct Authority does not regulate on Automatic Enrolment.

At JonSimon Financial Advice our pension specialists can help your business implement your new compulsory, auto-enrolment workplace scheme.

Our service is designed to help you reduce the time you spend on administration, allowing you to focus on activities that add value to your business. Our dedicated support team will be on hand to answer any questions or deal with any issues for both you and your workforce through implementation and once your scheme is up and running. 

Auto Enrolment is part of new legislation introduced by the government in October 2012. The legislation requires all UK employers to automatically enrol all employees that meet the qualifying criteria (depending on age and salary level) into a pension scheme. The scheme itself also needs to meet certain government requirements. This is being rolled out fully over a five and a half year period. UK companies with the largest workforce are first to participate, with their staging dates beginning in October 2012, followed by medium sized companies and finally small and micro companies.

Workplace Pensions and Auto-Enrolment has been introduced as people are simply living longer and have not been savings enough towards their income in retirement. This means people are enjoying a longer retirement and need to plan and save for their later years. The Government estimates that around seven million people are not saving enough to meet their retirement aspirations and as such has put changes in place, which commenced from October 2012 which affects both employers and employees. 

You may already have received a letter from the Pensions Regulator letting you know when this affects your business. The earlier you start planning the better. Leaving things to the last minute risks not being ready on time. The consequences of missing your auto-enrolment deadline are severe; damage to your reputation, impaired employee relations and fines from The Pensions Regulator.

 

What do the changes mean for employers? 


Since 2012, employers have been required to automatically enrol all ‘eligible jobholders’ into either the National Employers Savings Trust (NEST) or an alternatively another form of scheme, such as a Group Stakeholder Scheme, Group Personal Pension Scheme or an Occupational Pension Scheme which is deemed as a ‘qualifying’ or a ‘certified’ workplace pension. Both Employers and Employees have to make minimum contributions into the scheme. The process is being staged, dependent on Employee head count, from 1st October 2012 to 1st February 2018, with large employers being the first to have to take action. 

 

What do I need to do as an employer?

 

There are various rules and regulations in relation to auto-enrolment. Some of the major responsibilities for an employer are:

 

  • If your company has a current pension scheme, you are required to review the current scheme and ensure it is compliant with the new auto-enrolment pension scheme regulations.
  • Employers will have to ensure all employees’ ages and salaries are assessed and sectioned into: ‘Eligible Jobholders’, ‘Non-eligible Job Holders’ and ‘Entitled Workers.’
  • Set up a qualifying pension scheme and enrol all ‘Eligible Jobholders.’
  • Deduct payments from employees’ salaries and disburse to pension providers.
  • Provide pension information to all employees.
  • Continuously review all employees, to ensure when ages or salaries change - potentially altering auto-enrolment eligibility - they are automatically enrolled onto the scheme when applicable.
  • Present relevant required information coherently to pension provider on a monthly basis.
  • Re-register your pension scheme every 3 years.
  • Process 'opt-out' requests and refund contributions.
  • Revisit and alter employee contracts/handbooks and induction materials to include the auto-enrolment procedures and pension scheme contribution details. 

 

What happens if you don't enrol your staff?

 

Employer duties are not optional. The Pensions Regulator will ensure employers comply with the new duties. Although their approach will be to educate and encourage compliance, employers will face substantial fines or even imprisonment if they don't comply. If you fail to have a qualifying pension scheme in place by your staging date, depending on the size of your company, you may face fines of up to £10,000 per day until one is put in place. The Pension Regulator, who are responsible for ensuring that every employer is compliant with auto-enrolment, have the use of Real Time Information reporting, which immediately provides information of missed deadlines. We believe not complying with auto-enrolment requirements is simply not an option.

 

Other key obligations as an employer include:

 

Workforce communication

 

How and when you need to communicate with your workforce is a key component of Auto Enrolment, employers have to meet certain guidelines and communicate certain information with employees within certain timescales. The Pensions Regulator can ask for evidence of all the communications you have provided your employees with and therefore it is important to have robust, compliant technology and systems in in place to ensure you are carrying out your obligations.

 

Ongoing monitoring and record keeping

 

Once you have successfully implemented your Workplace pension scheme, employers will be responsible for the ongoing maintenance of the scheme and have an obligation to keep certain records for certain periods of time. There are various pieces of information employers are required to keep about their workers and the pension scheme, this information must be provided to The Pension Regulator when requested, failure to do so or will be classed as a breach of scheme rules and will result in penalties.

Workplace pension and Auto enrolment is something employers simply have to get right, the responsibilities and obligations are seen by most employers as difficult to understand, implement and maintain, the penalties if your scheme is not set up and administered correctly are something we work with our clients to avoid.


Here at JonSimon Financial Advice we are currently working with businesses of various sizes with their obligations under Auto Enrolment, we offer our clients clear and honest pension’s advice based on long term experience. The team here at JonSimon Financial Advice will initially assess your businesses individual circumstances and then work with you to meet your Auto Enrolment obligations. 

We understand that every company is different and that’s why we will only formulate a plan once we fully understand you and your business. Here at JonSimon Financial Advice we have access to market leading Auto Enrolment and Workplace pension’s software to enable you to set up and meet your obligations with the regulator in a compliant and cost effective way. Please contact the team to learn more about your obligations as an employer and arrange for a free workplace pensions consultation.

At JonSimon Financial Advice our pension specialists can help your business implement your new compulsory, auto-enrolment workplace scheme.

Our service is designed to help you reduce the time you spend on administration, allowing you to focus on activities that add value to your business. Our dedicated support team will be on hand to answer any questions or deal with any issues for both you and your workforce through implementation and once your scheme is up and running.

  

AE


JonSimon Financial Advice Ltd is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited, which are authorised and regulated by the Financial Conduct Authority. Auto-Enrolment is not regulated by the Financial Conduct Authority.

JonSimon Financial Advice Ltd are a limited company registered in England and Wales. Company Registration Number: 08499050. Registered Office: 10-12 Church Street West, Radcliffe, Greater Manchester, England, M26 2SQ.

The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.


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