Auto Enrolment

All companies now have a legal obligation to provide a pension plan for all employees. Auto Enrolment is a new law stating every employer MUST enrol workers into a workplace pension scheme if they:

  • are aged between 22 and State Pension age
  • earn more than £10,000 a year
  • work in the UK

Cost of Auto Enrolment for workplace pension scheme;

 

Date
Employer min contribution of salary
Total min contribution as a % of salary
Before 05/04/18
1%
2% (including 1% staff contribution)
06/04/18 - 05/04/19
2%
5% (including 3% staff contribution)
06/04/19 onwards
3%
8% (including 5% staff contribution)

 

Auto enrolment will affect you unless

  • You’re a sole director with no staff
  • There are a number of directors without employment contracts
  • The company has ceased trading, gone into liquidation or been dissolved

A declaration must be completed and submitted to the Pension Regulator whether you want to opt in or opt out

The timescales and process for businesses that have to comply are:-

 

Steps Timeframe
Know your staging date Now
Provide a point of contact within next 3 months
Check who you need to enrol within next 3 months
Create your action plan within next 3 months
Work out your costs within next 3 months
Check your records and payroll process within next 6 months
Assess and enrol your staff By August 2016
Write to your staff By August 2017
Your ongoing automatic enrolment duties By August 2018
Complete your declaration of compliance (registration) 5 months after staging date

 

 

The cost of not complying or meeting the deadlines are:-

1. A fixed penalty notice will be issued if you don’t comply with statutory notices, or if there’s sufficient evidence of a breach of the law. This is fixed at £400.

2. Penalties ranging from a prescribed daily rate of £50 to £10,000 depending on the number of staff.

3. Civil penalty for cases where you fail to pay contributions due. This is a financial penalty of up to £5,000 for individuals and up to £50,000 for organisations.

4. Where employers fail to comply with a compliance notice or there is evidence of a breach, the regulator can issue a prohibited recruitment conduct penalty notice. This penalty has a prescribed rate of £1,000 to £5,000 depending on the number of staff the employer has.

At ODA we can assist with the registration and compliance, the charges are:-

Options
Fees + VAT
Sole director opt out
£150
Auto Enrolment review report and meeting
£250
Registration for Auto Enrolment
£500
Monthly process and reporting obligations
From £30