In an effort to encourage more people to save for their retirement, the Government has decided to require employers to automatically enrol most of their workforce into a pension scheme.
Unless employees opt-out usually both the employer and the employee must pay contributions into the scheme, (although it is possible for the employer to pay all the contributions). Most people call this automatic enrolment, auto enrolment or AE.
Do I have to enrol my employees into a pension scheme?
Yes you do. While there are some employees who may not have to be automatically enrolled, and in certain circumstances you can postpone enrolment, you need to be very clear who you have to enrol and who you don't.
If you don't adopt automatic enrolment for employees who are supposed to be enrolled you can be fined.
When does auto enrolment start?
Your start date, which is known as your staging date, depends on the number of employees on your PAYE Scheme at 1 April 2012. The Pensions Regulator will write to alert you twelve months and three months before you are due to start.
If your start date is still a long way off, the size of your organisation when you actually start may be very different than it was in April 2012.
The table below shows the exact staging dates for employers with a PAYE Scheme of 250 or more employees.
|Paye Scheme Size||Date|
|120,000 or more||1 Oct 2012|
|50,000 - 119,999||1 Nov 2012|
|30,000 - 49,999||1 Jan 2013|
|20,000 - 29,999||1 Feb 2013|
|10,000 - 19,999||1 Mar 2013|
|6,000 - 9,999||1 Apr 2013|
|4,100 - 5,999||1 May 2013|
|4,000 - 4,099||1 June 2013|
|3,000 - 3,999||1 July 2013|
|2,000 - 2,999||1 Aug 2013|
|1,250 - 1,999||1 Sept 2013|
|800 - 1,249||1 Oct 2013|
|500 - 799||1 Nov 2013|
|350 - 499||1 Jan 2014|
|250 - 349||1 Feb 2014|
|50 - 249||1 April 2014 - 1 April 2015 (inclusive)|
|30 - 49||1 Aug 2014 - 1 October 2015 (inclusive)|
|Fewer than 30||1 Jan 2016 - 1 April 2017 (inclusive)|
Employers with less than 250 employees begin to enrol on 1 April 2014 at the earliest, and for employers with less than 50 employees it's even later. If you have less than 250 employees and want to find out your exact staging date, visit the Pensions Regulator’s website: www.thepensionregulator.gov.uk
How can TB Patterson Associates help you?
TB Patterson Associates can provide you with guidence on how to initially and regularly asses your workforce, default investment funds, mandatory employee communications, postponement, contribution levels, employee opt-outs and scheme choice.
We can provide you with bespoke company specific auto enrolment solutions. Contact us to discuss your auto enrolment plan in more detail.
Important Note: Auto Enrolment is not regulated by the Financial Conduct Authority.