Home News Don’t get fined: Avoid these auto-enrolment pitfalls

Don’t get fined: Avoid these auto-enrolment pitfalls

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Auto Enrolment

Are you sure you’ve completed all your automatic enrolment duties?

Don’t risk a fine – as an employer, it’s your responsibility to ensure your Declaration of Compliance is submitted.

There are two dates you need to be aware of.

Your staging date – the date your duties start – and your Declaration of Compliance deadline, the date by which you need to tell The Pensions Regulator (TPR) what you’ve done to comply with the law.

Some employers who declared their compliance late have told TPR that they thought this task was being done by someone else.

If someone else is completing these duties on your behalf, it remains your responsibility as an employer to ensure your Declaration of Compliance is submitted on time.

You risk a fine if you don’t complete and submit this on time. TPR has a declaration of compliance checklist to help you.

If you recently employed your first member of staff, don’t forget you have automatic enrolment duties.

If your businesses recently employed someone for the first time, you should already have received a letter from TPR about automatic enrolment. Don’t ignore it – you have legal duties to meet.

TPR has online information that will help you – take five minutes to complete TPR’s duties checker to find out what tasks you need to complete and by when.

Are you thinking about starting a business and taking on a member of staff? Don’t forget you have automatic enrolment duties.

If you are starting a new business and taking on a member of staff then, as well setting up a PAYE scheme and deciding what to pay, you’ll need to assess them to see if you need to put them into a workplace pension scheme.

This is called automatic enrolment and is a legal duty.

Don’t stick your head in the sand – you risk a fine. You should start preparing early to work out what you’ll need to do.

TPR has produced a short video to help:

Going forward, TPR carries out spotchecks to make sure businesses are up to date with their ongoing duties.

Monitor the ages and earnings of your staff

You must monitor the ages and the amount you pay your staff (including new starters) to see if you need to put any of them into a pension scheme. You must put them into a pension scheme and write to them within six weeks from the day they meet the age and earnings criteria.

If you have any staff who are…

  • aged between 22 up to state pension age*
  • andearn over £10,000 per year, or £833 per month or, £192 per week

… you must put them into your pension scheme and you must both pay into it.

*If you are unsure what the state pension age is you can use the State Pension Calculator to find out.

Manage requests to join or leave your scheme

If any of your staff, who can ask to join your scheme, write to you asking to do so, you must put them into it within a month of receiving their request.

You will have to pay into the pension scheme unless they are:

  • aged 16-74
  • andearn less than £490 a month or £113 per week.

To find out how much you will need to pay you should ask your pension scheme provider.

If any of your staff choose to leave your pension scheme within one month of being put into it, you need to stop taking money out of their pay and arrange a full refund of what has been paid to date. This must happen within one month of their request.

Keep records

You must keep records of how you’ve met your legal duties, including:

  • the names and addresses of those you’ve put into a pension scheme
  • records that show when money was paid into the pension scheme
  • any requests to join or leave your pension scheme
  • your pension scheme reference or registry number

You must keep these records for six years except for requests to leave the pension scheme which must be kept for four years.

Re-enrolment

Every three years you’ll need to put staff back into your pension scheme if they have left it, and if they meet the criteria to be put into a pension scheme. This is known as re-enrolment. We will write to you in advance of your re-enrolment date to explain more.

More about re-enrolment.

© Cumbria Chamber of Commerce

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