Workplace Pension

Work Place Pensions (Auto Enrolment) is probably the biggest single change, and one of the biggest administration nightmares that has ever been made to payroll for All employers not just large companies.

Every employer in the UK must now provide a pension scheme for their employees, and automatically enrol eligible employees unless the employee opts out. Certain employees who are not eligible must be given the opportunity to join the scheme. All employees must be continually monitored, and those who become eligible for auto enrolment or voluntary membership, and those who have declined membership must on certain review dates be offered the opportunity to join the scheme.

It is the employers legal obligation to provide the scheme, contribute to the scheme, administer & monitor the scheme for all employees between 22 and state pension age. There are no exceptions. Even if all your employees opt out, you must still offer a scheme and continue to review and offer membership on a regular basis to those eligible to join.

Employees under 22 or over the state pension age who pay tax, and those who earn between £5,668 and the income tax threshold, may choose to join the scheme even though they are not eligible for auto-enrolment. The employer will need to make contributions for those workers.

Workers earning less than £5,668 can apply to join the pension scheme chosen by the employer. The employer will not need to contribute to their scheme, but the employer cannot refuse membership, and has an obligation to deal with these applications.

Employers need to monitor when workers become eligible for the different stages of auto-enrolment and when those who have opted out need to be re-enrolled.

Employers will need to keep records about workers who join the pension scheme for at least six years. Records should include the name, date of birth and earnings of each joiner as well as opt-in notices. Opt-out notices must be kept for four years.

The scheme requires continual monitoring, and this is best done through the normal payroll process. As part of the Payroll for Business package we offer all our clients a free review of their Auto Enrolment obligations. We can then as part of the normal payroll process provide the information for you to administer the scheme yourselves, or we can take the whole process out of your hands, and effectively send you a payment slip similar to your monthly PAYE, so your only involvement is sending your payment to your chosen pension provider.

Employers will need to monitor the earnings of those workers below the tax threshold over a rolling 12 month period. A spike in earnings may result in needing to auto-enrol the employee, this may happen if the employee is paid a bonus or overtime.

Once enrolled, employers must continue to contribute for as long as the worker earns, even if his earnings dip below the income tax threshold.

If you wish to discuss your payroll or need any assistance with auto enrolment, please contact us now by clicking HERE.

The following steps form part of our free assessment for Clients.

  • Obtain details of your staging date ( this is based on the number of employees you had in April 2012)
  • Assess your workforce for the 3 pension categories.
  • Nominate a contact point
  • Prepare an Auto Enrolment plan.

The following steps form part of our set up scheme, and involve a one off fee.

  • Select & nominate an eligible pension scheme.
  • Write to all your workers between the ages of 16 & 75 detailing how the scheme affects them personally, and stating their options.
  • Automatically enrol all eligible employees who have not opted out.
  • Action all responses from non-eligible employees.
  • Register with the pensions regulator, and provide the required information.

As part of our normal payroll processing, we will provide a monthly list of deductions made from employees, but we will not carry out scheme monitoring. Our enhanced package takes all the scheme administration away from you, and becomes part of our normal weekly / monthly payroll package. There may be scheme variations, but the following is included in our enhanced package.

  • Continual monitoring of all employees for eligibility to Auto Enrolment.
  • Dealing with all communication regarding auto enrolment.
  • Communication as required with your employees regarding payroll / auto enrolment.
  • Communication with new employees regarding their auto enrolment status.
  • Communication with the pension provider regarding employee’s deductions.
  • Communication with the pension provider regarding pension contributions.
  • Communications with employees leaving regarding auto enrolment.
  • Provision of monthly payment slips for scheme contributions.
  • Provision of reports detailing auto enrolment status & financials

Please note that dependent on your chosen scheme, you may need to provide other written communication to the employees regarding the scheme & its performance, this may be done by the pension provider, and forms part of the scheme administration not part of auto enrolment.

If you wish to discuss your payroll or need any assistance with auto enrolment, please contact us now by clicking HERE.

If you do not wish to contact us, but still require further information, please watch the government’s short film or click HERE to be taken to the pension regulators web site which you may find useful.

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