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Auto Enrolment Becomes Business as Usual

Since 1st October 2017, every employer in the UK now must place certain staff into a pension scheme and contribute towards it. Until now, there has been a roll-out programme in place – slowly bringing employers into Auto Enrolment by reference to a future ‘staging’ date. For existing employers, the final staging dates will be February 2018 depending on when they registered as an employer.

But those becoming an employer for the first time on or after 1st October 2017 will immediately have auto enrolment duties. On the first day a person starts working for them (known as their duties start date), they should formally assess them to see if they meet the criteria to be put into a pension scheme.

To be auto enrolled, staff must be aged between 22 and state pension age, and earn over £10,000 per year (£833 per month, or £192 per week). A Declaration of Compliance must be submitted to the Pensions Regulator, even if no one meets the auto enrolment criteria.

The employer must give the following enrolment information to each eligible jobholder who is being automatically enrolled within the joining window.

  • A statement that the jobholder has been enrolled into a pension scheme
  • The jobholder’s automatic enrolment date
  • The value of any contributions made by the employer and the jobholder
  • If the pension scheme chosen for automatic enrolment is a DC occupational pension scheme or personal pension scheme, a statement advising the jobholder of the phased increase in contributions as part of the introduction of the reform
  • A statement that any contributions payable to the scheme by the jobholder will be deducted from pensionable pay
  • Confirmation as to whether tax relief will be given on employee contributions

Once enrolled into an automatic enrolment pension scheme, the jobholder can decide to opt out of the pension scheme. Automatic enrolment into an automatic enrolment scheme is compulsory, but ongoing membership is not. A jobholder has the right to opt out of pension scheme membership, but cannot opt out of automatic enrolment.

Once automatic enrolment has been completed, an employer will have ongoing responsibilities, such as paying contributions, managing the opt-out process and keeping records.

Sutton McGrath Hartley provide financial advice in Sheffield, Chesterfield and Rotherham.

If you’ve recently started a business and are unsure of your auto enrolment responsibilities or been putting off enrolment since the passing of your staging date, please get in touch and we can discuss how to ensure you meet the requirements.

Telephone – 0114 2664432.

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