Planning for Auto Enrolment
The seven steps to enrolment:
One – Know your staging date
The date that the new law applies to your company is known as your staging date. The Pensions Regulator recommends a planning period of 18 months prior to your go live date to ensure all of the processes are in place, and to avoid any penalties.
Two – Assess your workforce
Assessing your workforce will identify each jobholder category and will allow preparation of budgets and communication strategy.
Three – A Review existing pension scheme
If you have an existing pension scheme, you may wish to consider enrolling all eligible jobholders into this scheme, providing it qualifies as an automatic qualifying scheme.
Three – B – Choose a qualifying pension scheme
If you need to select a qualifying pension scheme, you can choose from a number of pension providers including the National Employment Savings Trust (NEST) which has a public service obligation to accept all employers that apply to join it.
It is important that the pension scheme you choose will deliver good outcomes for your workers’ retirement savings. A financial adviser can offer advice on the available pension schemes which are suitable for your company.
Four – Communicate the changes to all your workers
Employers must inform all their workers in writing about the changes detailing how they are affected by the changes. This communication must be provided in writing (which can include being sent by email) and must be specific to the individual. The duty is on the employer to provide the right information to the right individual, at the right time.
Five – Automatically enrol your eligible jobholders
There is a process that employers will need to follow in order to make an eligible jobholder a member of an automatic enrolment pension scheme. Certain information about your eligible jobholders will also need to be supplied to pension scheme managers for example at specific points in the process.
Six – Register with The Pensions Regulator and keep records
You are required to inform TPR how you have fulfilled your new automatic enrolment duties by registering this information online with them shortly after your staging date. You will also need to maintain specified records about enrolled workers, their status within the scheme, the payment of contributions and the qualifying scheme itself. Records will also need to be kept for those enrolled workers that opt out of your pension scheme. You will need to monitor the age and earnings of all workers who are not eligible jobholders and not already in a qualifying scheme on an ongoing basis.
If any worker’s circumstances change in a pay period so that they become an eligible jobholder, they will need to be automatically enrolled.
Seven – Contribute to your workers’ pensions
After your staging date, you must contribute to your chosen pension scheme on behalf of your workers. The minimum contribution rates that an employer must pay into their workers’ pension scheme will be introduced gradually. This is known as ‘phasing’. The minimum employer contribution will change from 1% to 3% over time.
More detailed guidance can be found on the Pensions Regulator’s website: http://www.thepensionsregulator.gov.uk/employers/getting-ready.aspx