If you employ staff, automatic enrolment brings a set of duties around workplace pensions. Meeting them well supports your team and keeps you on the right side of the rules.
What is automatic enrolment?
Introduced in 2012 and now fully in force, the legislation requires employers to enrol eligible workers into a suitable workplace pension scheme and to contribute to it.
Understand your workforce
Worker classifications affect your duties. Different contract types — agency workers, contractors and so on — carry different obligations, so it’s worth mapping these out carefully.
Systems and software
Compliance is far easier with well-configured payroll software that automates the essentials: tracking ages and earnings, and deducting pension contributions.
Review existing arrangements
If you already run a pension scheme, check it meets the automatic enrolment criteria. You may need to adjust scheme rules or terms, and consider how the rules interact with arrangements such as salary exchange.
Communicate with staff
Give workers clear, timely information about the contributions going towards their pension — especially when someone’s category changes.
Stay compliant
Meet your duties to avoid enforcement action by The Pensions Regulator, as non-compliance can lead to notices and penalties. You’ll also need to complete a declaration of compliance within five months of your duties start date. The Pensions Regulator’s guidance for employers is a helpful starting point.
Important — the risks
The performance of your investments is subject to risk. Its performance may fluctuate based on movements in the market and economic conditions. Capital is at risk. Currency movements may also affect the value of investments. You may get back less than you originally invested.
Past performance is not a reliable indicator of future performance. Tax treatment is based on an individual’s unique circumstances and may be subject to change.