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;
|06/04/18 - 05/04/19|
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:-
|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:-
|Sole director opt out|
|Auto Enrolment review report and meeting|
|Registration for Auto Enrolment|
|Monthly process and reporting obligations|