Key Information you must know about Pensions Auto-Enrolment. Workplace pensions
If you are a business owner employing workers for the first time since 1 October 2017. The pensions auto-enrolment scheme is something you want to pay close attention to.
Auto-enrolment (AE) for workplace pensions, in a process that started in 2012. This now applies to nearly every employer who had workers on their payroll before 1 October 2017.
New Conditions Workplace Pensions
Now, since 1 October 2017, once you employ a worker, you automatically assume AE duties. Your employees must be auto-enrolled in the workplace pension if they meet the following conditions.
- If they are aged between 22 and state pension age, and
- If they earn more than £10,000 per year; £833 per monthly; or £192 per week. The only grounds for exemption from the workplace pension is if the employee tells you they’d like to opt-out. So, if all your employees do not meet these criteria, you are safe right? Wrong. Because, according to pension regulations, even if all your employees don’t meet these criteria you may still have Auto-Enrolment responsibilities. This is where you need to pay close attention: You will be required to set up workplace pensions for workers who may not be eligible for auto-enrolment but have the right to join or opt-in a workplace pension and wish to do so. So how should you go about this as a new employer?
The following are other conditions that exclude you from auto-enrolment.
- If you are the only director in your company without any workers.
- If there are more than one directors in your company but each without a contract of employment (except one). Should you be contacted by TPR about auto-enrolment responsibilities, you’ll need to inform TPR that there are no workers in your company that qualify for auto-enrolment.
But there is a catch. If you are currently exempted from auto-enrolment by this director-only clause but on or after 1 October 2017, you employ a worker, your company will be viewed as ‘new employer’ and therefore have new auto-enrolment duties.
- Review your employees and find out if they are eligible for auto-enrolment in workplace pension.
- If they are not, check if they have a right to join or opt-in the workplace pension, and then
- Send letters to your employees detailing their auto-enrolment rights. The Pensions Regulator(TPR) provides standard letters as well as guidance on how to use these letters.
Your Deadlines Workplace Pension
The deadline to issue to correct letters to your employees and set up a workplace pension for them. If needed is five months, starting from when you auto-enrolment duties begin (the staging date).
You can be fined by The Pension Regulator for missing deadlines and although there is usually some leniency. These rules are being monitored with more strictness.
Contact us if you need any professional guidance or further clarification about of auto-enrolment in workplace pensions.