Auto-enrolment feels as if it has been around for years now, and for large employers it has been.
The smallest companies are now reaching their staging dates – so what do you need to know or do?
Check whether you are an employer?
It is possible that you were exempt when the initial letters were sent out but now the business has grown and you have taken on an employee and that exemption now longer applies.
Or what if you have taken your spouse on to the payroll, if you are not both directors then this may mean an obligation to set up a pension.
If you are still not an employer
Have you notified The Pensions Regulator? You need to go through the duties checker on the website and confirm that you are outside the scope of the auto-enrolment rules.
If you are an employer now
You need to choose a pension scheme and set it up. You need to do this even if all your employees opt out. There are a number of pension scheme providers for the smallest of companies . At Clearways Accountants, clients have generally opted for the Government NEST Scheme but others such as Smart offer a small company scheme.
Not sure what the wage criteria are?
The earnings levels are linked to the National Insurance bands and so for 2017-18 the bands for each type of worker are:
| Annual earnings | Age | ||
| 16-21 | 22-state pension age | State pension age -74 | |
| Less than £5,876 | Have the right to join a scheme (entitled worker) | ||
| £5,876 to £10,000 | Has the right to opt-in (non-eligible jobholder) | ||
| Over £10,000 | Has a right to opt in | Automatically enrolled | Has a right to opt in |
Once you are up and running remember to:
Make your declaration of compliance – The Pension Regulator needs you to log in and make this declaration so the system is up to date.
Can you ignore all of this?
Please don’t! The latest figures from the regulator show that more employers are being issued with £400 penalties, although there is a right of appeal, none had been successful up to October 2016. The majority of these fines were for non-completion of the declaration of compliance.
If you need help meeting you obligations or even assessing whether you need to set up a scheme then please contact us.