The law on workplace pensions has changed. Every employer with at least one member of staff now has new duties, including putting those who are eligible into a workplace pension scheme and contributing towards it.
Nearly six million staff have already been put into a scheme by the UKs large and medium employers, but the vast majority of small employers have yet to reach the date their automatic enrolment duties start – this is called their staging date.
A monster of a campaign to grab your attention
You may have noticed a new character recently arrived to help remind employers that the law has changed and that they have new workplace pensions duties.
Workie, the friendly, furry giant comes with a serious message: it’s time for small and micro employers to act. This big, colourful character will be seen visiting people in all sorts of work environments over the coming months, asking employers not to ignore the workplace pension.
Alongside the advertising campaign The Pensions Regulator has launched a new online step by step guide www.tpr.gov.uk/en/employers. The guide is designed to meet the needs of employers who may not have pensions experience including those with just one or two staff. It uses everyday language, is interactive and contains videos and infographics so that employers can easily understand what they will need to do.
The step by step guide also has a duties checker www.tpr.gov.uk/en/employers/duties-checker and all employers are urged to input their details so that they can receive information tailored for them.
Research indicates that the majority of small and micro employers will ask their business adviser for help. And in 2016, 500,000 UK employers will start their workplace pensions duties – if you haven’t already been contacted by your clients, you can expect to be approached soon.
Are you prepared to deal with this potential increase in business, and do you know which services you will offer? With this in mind, you may want to contact your clients sooner rather than later to find out when their duties start and agree how you’re going to help them. Then you can identify your busy times and plan your workload.
Decide and agree with your clients what services you will offer
Although the employer ultimately has the legal responsibility for complying with their automatic enrolment duties, there are a number of services you can provide to support your clients.
The Pensions Regulator has developed a business adviser’s online guide to automatic enrolment, which you may find helpful during this process. The guide will provide you with useful information on all the different tasks involved – from choosing a pension scheme and checking who to enrol to completing the declaration of compliance. www.tpr.gov.uk/automatic-enrolment-guide-for-business-advisers.
Before deciding which services you will offer, It’s important to understand what to do and by when and this will depend on the circumstances of your clients and their staff. To work this out look at the timeline and tasks below.
|12 months before staging||Confirm your client has automatic enrolment duties and check their staging date.|
Arrange to be nominated as a secondary contact: The Pensions Regulator will then send you important information at key points prior to your client’s staging date (and afterwards) which will help you to keep track of progress.
Check which staff members need to be put into a pension scheme.
|6 months before staging||Work out your client’s costs (i.e. employer pension contributions, choosing and setting up a pension, getting new or upgraded payroll software that supports automatic enrolment)|
Check records: Identify missing or incorrect staff data records, to reduce the chance of data-related errors occurring once the data is sent to the pension provider.
Check payroll processes: Investigate and recommend alternative/upgraded payroll software, if appropriate
Choose a pension scheme: Check whether the employer currently has a pension and if it can be used for automatic enrolment. Note that you can provide generic information to the employer to assist them in selecting a pension for automatic enrolment. You may also provide investment advice to the employer even if you aren’t authorised by the FCA. You must be clear that you are providing such advice to them in their capacity as an employer and not as an individual.
It’s worth noting that a scheme only needs to be put in place if there are staff to enrol – there’s no requirement to set up a scheme ‘just in case’ this happens.
Consider whether postponement would be helpful: Postponement may help your clients to align automatic enrolment with business cycles (ie payroll dates), and is also useful for those who employ staff for a short period of time.
|On your client’s staging date||Assess and enrol staff: At your client’s staging date, they must carry out a formal assessment of their staff to work out their automatic enrolment duties for individual members of staff. Once this is done, your client must ensure eligible staff are enrolled by sending their pension scheme the information they need to make them active members of the scheme.|
Write to your client’s staff to explain how automatic enrolment applies to them.
Know your client’s ongoing duties
|After your client’s staging date||Declaration of compliance: Your client must provide information to show they are meeting their automatic enrolment duties. This means completing a declaration of compliance using our online service within five months from their staging date.||www.tpr.gov.uk /completing-the-declaration-of-compliance|
If you wish to go through any of the above please do not hesitate to contact us.
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