Automatic Enrolment Help

31 July, 2013 | Uncategorized

Making your way through the legislation of Auto Enrolment could be a lengthy process so it is important that you have a structured paln. Here is a guide of what you need to be doing:

1. Nominate A Point of Contact

You will receive correspondence from the pension’s regulator around 12-18 months before your staging date. At this point you should nominate a point of contact to ensure updates from the regulator get to the most suitable person.

 

2. Know Your Staging Date

Your staging date is the date by which you will need to be compliant with new legislation. This date is based on the total number of people in your largest PAYE scheme as of 1st April 2012. If this is less than 30, it will also be based on the last two digits of your PAYE code.

You can find your staging date here http://www.thepensionsregulator.gov.uk/employers/staging-date-timeline.aspx

 

3. Assess Your Workforce

This for many employees will be one of the most admin intensive parts of Automatic Enrolment. You need to segregate your employees into 3 categories. Eligible Jobholder, Non-Eligible Job Holder and Entitled worker. Which category your employees fall into will depend on their age and their earnings. Not only does this have to be done in time for your staging date but this process will also have to be done at every Pay Period after your staging date.

 

4. Find A Suitable Provider

As many employees will now be contributing into a pension plan it is important that you not only find a suitable provider to administer a scheme which keeps you compliant, but will also provide a quality pension plan for your employees.

 

5. Communicate to Workers

You need to ensure that you provide the correct information to each employee  both before and after automatic enrolment.

 

6. Automatically Enrol Eligible Job Holders

From your staging date you need to ensure that you auto enrol all eligible job holders. For any eligible job holders and make contributions in line with Automatic Enrolment legislation.

The amount you and your employees have to contribute to the pension scheme will be phased in. You have 4 options in calculating the contributions required however the minimum contribution requirement is shown below. The percentages are based on a percentage of band earnings (currently earnings between £5,668 and £41,450 per annum which are liable to change annually)

Phasing Date

Employer Contribution

Employee Contribution

1st Feb 2014 – 30th Sep 2017

1%

1%

1st Oct 2017 – 30th Sep 2018

2%

3%

1st Oct 2018 onwards

3%

5%

 

So you can see it is important to be prepared for the administrative burden as well as the cost of contributions. Future Asset Management work with employers to ensure that they transition into Automatic Enrolment smoothly and help them offer an added benefit to their employees. Feel free to give us a call to see how we can help.

 

By Graham Wingar

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