I think we have all seen the adverts of the blue hairy monster, from the Pension Regulator telling you not to ignore the workplace pension. Over the next two years, there is estimated to be over 1,000,000 small and micro businesses that will be required to offer a workplace pension and auto enrol their employees into a qualifying pension scheme.
The rules around Auto Enrolment mean there’s a huge responsibility for small businesses to be and remain compliant with the new legislation. If you have been issued with a 2016 staging date, here are a few important points to consider:-
Don’t Sit on It
With the sheer volume of small businesses impacted this year, there is expected to be an increase in demand for the advice of professional advisers. It is critical that you do get the right advice, so seek this out as soon as you get your staging date from your accountant or a pension adviser.
Be Informed
For those thinking that it will make life easy by opting for the government’s NEST scheme, we would recommend that you way this up first, by getting all the facts and figures. Your pension is an investment for your future and as many of you have seen and also suffered in the past with the downturn in the market and precarious advice, it’s important to reach the best informed decision that you can possibly make about your investment and not necessarily the one that’s promoted the most.
Penalties
Don’t ignore your staging date, the government can be unforgiving, and there are hefty penalties in place for those missing deadlines.
Already have a Company Pension?
For those that already have a pension scheme in place, does it comply with the Pension Regulator standards? If not, your current scheme may need to be revised.
Plan for It
Auto enrolment is not going to go away and as a small business, you will need to anticipate the financial costs involved with operating a company pension over the next few years.
Ongoing Assessment
As an employer, you will be required to assess your workforce to determine whether they are to be treated as a ‘worker’. This assessment is required on the staging date. But your responsibilities don’t stop once you’ve enrolled all employees that are eligible, this will become part of your everyday management. Employees need to be assessed regularly, ideally before you run your payroll, in order to assess any new employees or a change of employee eligibility.
After Finding the Right Pension
Once you have chosen the right pension, you will need to write to your employees informing them of what is taking place and also of their rights, this will need to meet the specific requirements laid out by the Pension Regulator.
When it comes to implementation of your payroll, ensure all your data is carefully reviewed and up to date on your payroll system. It’s then down to you to pay the correct contributions on time to your employee pension scheme, also deducting the employees’ contributions through your payroll.
Our Guide
Preparations for auto enrolment will have an impact on your time and there’s certainly much you have to think about. You can find out more about auto enrolment, who is eligible and how much you will have to pay, in our guide.
If you are considering outsourcing your payroll, even if it’s just for one or two people, we have set up a number of schemes for our payroll clients and can easily help you with your decision on the right pension for your business from your staging date, assessing your employees and enrolment into a qualifying suitable scheme as well as the smooth ongoing running of your pension contributions along with your payroll.
We are dedicated small business accountants, payroll specialists and business advisors, if you have any questions, please call us on 01253 899989 or why not book a free consultation.
