Most small businesses will be staging this year, our staging date is 1st November and we have clients who are staging every month this year and some into next year.
You may have received a letter from the Pensions Regulator and this means they are aware that you have employees who may be eligible and hence require you to set up a pension scheme and automatically enrol them into it.
The Pensions Regulator has created an interactive online tool to help small businesses . Start here to figure out whether you need to enrol any staff and if you don’t you can notify the regulator of this and relax.
If you are an employer who has to provide a pension you are encouraged to choose a pension next, however, as an accountant, I recommend you first establish who of your staff are eligible, non-eligible or entitled under the scheme so you can estimate your contribution costs.
Type 1 – eligible – between age 22 and their state pension age and earn over £833 per month or £192 if weekly paid. You must set up a pension scheme and enrol these staff without discussing it with them.
Type 2 – staff outside of the above age and salary ranges do not compel you to open an auto-enrolment scheme but may opt in or join the scheme and you may have to pay contributions for them if they do so.
See this info-graphic prepared by our friends at Sage , which makes it rather easier to understand!
There is no substitute, however, for going through the process on the Pension Regulators toolkit to be sure you know exactly the status of your employees.
From this information you can estimate the cost of the 1% contribution you will required to make.
I’m sure that will be enough for now and should leave you feeling more in control of the situation when you know your obligations to your staff and how much the pension scheme is likely to cost.
Do not discuss Auto-enrolment with your employees, there are heavy fines for any apparent influence on employees to opt out.
If you feel you need hands on support then please contact Carole Jordan FCCA on 01273 882200 or via: firstname.lastname@example.org
All details above were correct at the time of publishing - for more up to date information please
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