Completing your auto-enrolment duties – what you need to know

Important procedures for completing your auto-enrolment duties 

More than half a million employers completed their auto-enrolment duties by 31 March 2017, according to figures by The Pensions Regulator (TPR).
7.6 million workers are now saving for their retirement through a workplace pension since auto-enrolment began in 2012.
In addition, 136,000 small and micro employers fulfilled their duties for auto-enrolling employees in Q1 2017.
Charles Counsell, Executive Director of Auto-Enrolment at TPR, said: “Hundreds of thousands more employers are due to follow suit over the coming months and it is vital they act early and do not leave themselves open to being fined.
“I would urge every employer to check today that they know what they need to do and when they need to do it. Now is the time to seek help if you need it.”
If you’re an employer and have yet to complete your auto-enrolment responsibilities, here is a guide on the key steps to take…
Start date
Your start date (sometimes called a staging date) is set by the TPR and is based on the size of your payroll in April 2012. All businesses will have reached their staging date by February 2018.
Responsibilities
Auto-enrolment applies to any worker who earns more than £10,000 a year, is between 22 and state pension age and normally works in the UK.
If any of your workers meet these criteria, it is your responsibility to:
  • select and set up a suitable pension scheme
  • evaluate eligibility of staff at every pay period
  • add eligible workers to the selected pension scheme and make contributions
  • keep accurate and up to date records.
Contributions 
All employers need to pay the minimum contribution based on a worker’s qualifying earnings. The current level you need to pay is 1% which is set until 6 April 2018. After this date it will rise to 2% then 3% in April 2019.
Opting out
Employees have the right to opt out of the pension scheme once they’ve been enrolled.
They must provide you with an opt-out notice, which is usually provided by the pension scheme provider.
It is then your responsibility to remove them from the scheme. Employees may be due a refund for any contributions they’ve made to the scheme.
Penalties
Failing to comply with your auto-enrolment duties will result in penalties.
First you’ll receive a compliance notice which details the problem and a timeframe for putting it right. If the matter is not resolved, you’ll receive a fixed penalty of £400.
If you continue to fail to meet your obligations, you’ll be charged a daily fine.
Number of employees
Daily rate
1-4
£50
5-49
£500
50-249
£2,500
250-499
£5,000
500+
£10,000

 

 

 

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Condies is a progressive chartered accountancy practice with offices in Dunfermline and Edinburgh. The firm was established in the 1920s and has a growing client base throughout Scotland, ranging from individuals and family businesses to professional partnerships and large commercial companies. Condies offers a range of compliance and value-added services and specialises in a variety of industry sectors.