Starting from April 2014, companies with less than 250 employees will need a workplace pension scheme that meets qualifying standards set out by the government.
The Pensions Regulator will fine any organisation that doesn’t comply up to £2,500 per day.
You may already be preparing for auto-enrolment or you may not have started yet. Whatever stage you’re at, careful planning is critical and it’s probably more complex and will take longer than you think.
Why is the government enforcing it?
In 2008, the government introduced legislation to address the issue that people in the UK are not saving enough for their retirement. As a result, all employers must enrol their eligible employees in a pension scheme.
What do you need to do?
Each employer, depending on size, has been given a date when they will need to designate a qualifying workplace pension scheme (QWPS) into which they’ll automatically enrol all of their eligible employees. You will have to assess your employees to see which of the following categories they belong to:
| Employee | Category | Action |
| Employees already in the scheme on a qualifying basis | Existing Members | No joining action required |
| All other employees | ||
| Earning at least £833 a month (£192 a week) and aged 22 to State Pension Age | Eligible job holders | Employers need to automatically enrol these employees into a QWPS |
| Earning at least £833 a month (£192 a week) and aged below 22 or above State Pension Age | Non-eligible job holders | Not eligible for auto-enrolment. However, they can choose to join a QWPS and receive employer contributions |
| Earning between £481 and £833 a month (£111 and £192 a week) and aged 16-74 | Non-eligible job holders | Not eligible for auto-enrolment. However, they can choose to join a QWPS and receive employer contributions |
| Earning less than £473 a month (£111 a week) and aged 16-74 | Entitled workers | Are ‘entitled’ to join a pension scheme but employers don’t have to contribute for them |
You will have to make contributions on employees’ behalf and you’re obliged to tell your employees about the implications of auto-enrolment and how it will affect them. Also, the pension scheme will require a default investment option.
When is your staging date?
You need to start preparing at least six months before your staging date. It’s easy to underestimate what’s involved and the time it will take.
Even after you have started preparing, implementing your plans will take time and then there are on-going duties that every employer must fulfil. And remember, there are penalties for not complying .
How can Choice Financial Solutions help?
Well, for a start we can make a potentially complex world a whole lot simpler.
Here at Choice we offer easy solutions to support you in meeting your duties and we can help ensure that your employees understand the benefits you’re providing.
We can support you throughout the implementation of your qualifying workplace pension scheme, providing fast, simple solutions that make sure you and your employees get the very best outcomes.
To see how we can help you with Auto-enrolment or simply to get some further information, please contact us and we will be happy to help.