Workplace Pensions Winter Update
The law on workplace pensions has changed: now every employer in the UK must put their staff into a pension scheme and contribute towards it under the Pensions Act 2008. This is known as ‘automatic enrolment’, which is your legal duty as an employer.
No matter what stage of enrolment you are at, remember that you can run a quick check at any time to ensure you’re taking the required steps by the right dates:
Before you begin, you will need:
- Your PAYE reference (found on your payroll software, or letters from HMRC or The Pensions Regulator)
- 10 digit letter code (can be found here, or from letters from The Pensions Regulator)
- Age and approximate earnings of anyone you employ
If you need further information or advice on automatic pension enrolment, visit , or call the IGA member helpline on 0845 305 4230.
Pension Auto Enrolment News
Automatic enrolment (AE) is now business as usual for most employers. As outlined in their latest compliance and enforcement bulletin, the level of enforcement work The Pensions Regulator carry out has increased along with the number of employers who have AE duties to comply with.
In the last quarter alone they conducted approximately 25% of all AE enforcement activity they’ve ever taken.
Their enforcement strategy varies, from issuing compliance notices when an employer fails to declare their compliance on time, to spot checks from their enforcement team on targeted investigations.
Pension providers help us to identify non-compliance - if an employer sets up a scheme but never pays into it, The Pensions Regulator can be notified. Each case is examined, and if they find enforcement action is warranted, they act - Unpaid Contribution Notices (UCNs) can be sent, requiring all backdated contributions to be paid within 28 days.
This last quarter, they issued 753 UCNs – showing they take enforcement action where necessary.
From 6 April 2018, the minimum contributions employers and staff pay into their automatic enrolment pension goes up to 2% for employers and 3% for employees. This increase has been planned since automatic enrolment started, and will help employees to save towards an adequate income when they retire.
You will need to work out how the changes affect you, including checking that your payroll services are compatible. It’s best that you get ready early - there is guidance to help with this.
This month marks the busiest period for declarations of compliance yet, with more than 100,000 already completed by employers in November.
Completing the declaration is one of your legal duties under automatic enrolment, and must be done whether you have any staff to enrol or not.
If your declaration deadline is approaching, make sure you comply with your duties and complete it as early as possible.
With the festive season fast approaching, you may be planning to take on temporary staff, but you should remember that automatic enrolment applies to them the same as permanent employees, even if they’ll only be working for you for a short time.
You will still need to assess them when running payroll, and put any eligible employees into a pension scheme, which you should also pay into. You can also apply postponement to these staff to delay assessing them. .
The Pensions Regulator recently launched a new tool to help employers going through re-enrolment. Every three years, employers must put eligible members of staff who left their automatic enrolment pension scheme back into it, but exactly when they have to do this varies from employer to employer.
The re-enrolment tool is easy to use and clearly displays key dates in the process specifically for your organisation, helping you to understand what to do and when. You only need your PAYE reference and letter code to .
Remember, automatic enrolment is your legal duty and if you don’t comply you could be fined. Head to to ensure you’ve completed the necessary steps and are remaining compliant.