Recent findings show automatic enrolment doesn’t have to be costly for small and micro employers and that it pays not to put your head in the sand. Starting plans early leaves employers with time to research and shop around and also helps them avoid the risk of a £400 fine.
Employers should first head to the Pensions Regulator website – www.thepensionsregulator.gov.uk – and follow the step-by-step Duties Checker which gives advice on what to and by when.
The Duties Checker is designed for small employers without pensions experience and makes automatic enrolment as easy as possible. It’s also recommend that employers look at information detailing the set up costs employers might incur which will help people avoid any unnecessary expense.
Employers who have already reached their staging date – the date the law applied to them – should ensure they complete their declaration of compliance and submit it to the Pensions Regulator. This must be done within five months of the staging date. Employers are at risk of being fined if, despite putting staff into a pension, they fail to submit their Declaration of Compliance.
Key considerations to bear in mind:
− Employers must make sure they know what needs to be done and by when – even if you only employ one member of staff. The Pensions Regulator online Duties Checker will help with this – it takes five minutes to complete.
− Work out the costs which may be involved in terms of time and money – it may be less than people think. The Pensions Regulator website has information to help employers understand the one-off costs to set up automatic enrolment, as well as the ongoing cost of paying money into the scheme and managing the process.
− Decide who will complete the tasks. While you can carry out the automatic enrolment tasks yourself, employers may choose to ask a business adviser for extra support. It’s important employers understand and agree which tasks they are doing so that nothing is missed.
The business only has directors – do I still have duties?
You may be exempt from the automatic enrolment duties, but it’s important to check. If you are exempt but receiving letters from the Pensions Regulator, then you will need to tell them you are exempt. Take five minutes to complete the online Duties Checker, which will confirm what you need to do.
I need to find a pension scheme, but don’t know where to start.
Not all schemes offer the same level of services and some will charge more than others, so you should look at different schemes before you decide which is suitable for you and your staff. There is information on the Pensions Regulator website at www.tpr.gov.uk/scheme that can help employers choose a pension scheme, with a list of providers who can offer pensions to small employers.
I only have one staff member and their earnings fall under the threshold – do I have to do anything?
Yes, you still have legal duties to meet. For example, you will need to tell your staff about automatic enrolment, and complete and submit a declaration of compliance to let the Pensions Regulator know what you have done to meet your duties. Having a look at the online Duties Checker will confirm what the duties are and when they need to be met. It can be found at www.tpr.gov.uk/autoenrol
What will happen if I don’t complete the declaration of compliance on time?
Don’t leave your preparations to the last minute – if employers don’t submit a declaration of compliance on time, then they risk a fine. The date this needs to be submitted will be on all letters and emails sent to you. You can also find it out by completing the online Duties Checker.