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Employer Duties
This section helps you to understand the employer duties legislation. This will set out the details behind your duties as an employer and will also more importantly show you how we can help you navigate through this subject:

What are the Employers Responsibilities?

Employers have to ensure that the total minimum contribution made to the pension scheme must be 8% with the employer paying at least 3%, and to automatically enrol all workers that are eligible into a pension scheme that meets certain criteria. Employers will also have to maintain detailed records of compliance for a minimum of six years.

Preparing for Automatic Enrolment
* the following information is taken from The Pensions Regulator website: Preparing for automatic enrolment: A quick guide

There are 7 steps to prepare for automatic enrolment:

7 steps to prepare for automatic enrolment

Step 1: Know your staging date - when to act
The date that the new law applies to your company is known as your staging date. This date is determined by the size of your largest PAYE scheme.

Step 2: Assess your workforce
Workers who will need to be automatically enrolled in a pension scheme are called 'eligible jobholders'. An eligible jobholder is:

You will need to assess who in your workforce is an eligible jobholder. You must automatically enrol eligible jobholders into a qualifying pension scheme and make contributions on their behalf to that pension scheme. Workers who are not eligible jobholders will still have a right to opt into a pension scheme or a right to join one.

Step 3: Review your pension arrangements
A) Review your existing pension scheme
If you have an existing pension scheme for your workers, you may wish to consider enrolling all eligible jobholders into this scheme. To do this, your existing scheme will need to qualify as an automatic enrolment scheme (please see the information on qualifying schemes in section B).
If your existing scheme does not qualify, you may be able to change the scheme rules or amend the terms of the policy so you will be able to use it for automatic enrolment.
If you do not have an existing pension scheme or you cannot use your existing pension scheme(s) for automatic enrolment, you will need to choose another pension scheme. In this case, all eligible jobholders will need to be automatically enrolled in your new pension scheme.

B) Choose a qualifying pension scheme
If you need to select a qualifying pension scheme, you can choose from a number of pension providers including the National Employment Savings Trust (NEST) which has a public service obligation to accept all employers that apply to join it.
To be a qualifying scheme, minimum contributions must be made or it must provide a minimum rate at which benefits will build up. A scheme suitable for automatic enrolment must also not:

It is important that the pension scheme you choose will deliver good outcomes for your workers' retirement savings. A financial adviser can offer advice on the available pension schemes which are suitable for your company.

Step 4: Communicate the changes to all your workers
Employers must inform all their workers in writing about the changes detailing how they are affected by the changes. This communication must be provided in writing (which can include being sent by email) and must be specific to the individual.
The duty is on the employer to provide the right information to the right individual, at the right time.

Step 5: Automatically enrol your eligible jobholders
There is a process that employers will need to follow in order to make an eligible jobholder a member of an automatic enrolment pension scheme. Certain information about your eligible jobholders will also need to be supplied to pension scheme managers for example at specific points in the process.

Step 6: Register with The Pensions Regulator and keep records
You are required to inform us (The Pensions Regulator) how you have fulfilled your new automatic enrolment duties by registering this information online with us shortly after your staging date. You will also need to maintain specified records about enrolled workers, their status within the scheme, the payment of contributions and the qualifying scheme itself. Records will also need to be kept for those enrolled workers that opt out of your pension scheme.
You will need to monitor the age and earnings of all workers who are not eligible jobholders and not already in a qualifying scheme on an ongoing basis. If any worker's circumstances change in a pay period so that they become an eligible jobholder, they will need to be automatically enrolled.

Step 7: Contribute to your workers' pensions
After your staging date, you must contribute to your chosen pension scheme on behalf of your workers. The minimum contribution rates that an employer must pay into their workers' pension scheme will be introduced gradually. This is known as 'phasing'. The minimum employer contribution will change from 1% to 3% over time. The exact timing of phasing will be confirmed by the Government in early 2012.
Phasing will apply to most, though not all, types of pension scheme (your scheme provider will be able to tell you if phasing applies to you).

To access more detailed information about each of the 7 steps to prepare for automatic enrolment, please visit: www.tpr.gov.uk/7-steps where all the relevant information for employers and their pension professionals can be accessed.

 

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