Pensions Automatic Enrolment

The IAB is part of The Pensions Regulator’s Professional Bodies working group.  Please find below information and links to guidance on automatic enrolment to assist both members and businesses.

What is automatic enrolment?

People are living longer yet too many people are under-saving or not saving at all for what could be a long retirement. The law on workplace pensions has changed to make it easier for millions more people to build up a pension, particularly those on lower incomes.

Automatic enrolment means that, rather than having to actively choose to join a pension scheme, workers are put into one by their employer as a matter of course. To encourage people to stay in pensions saving, those who don’t want to be in must actively choose to opt out.

Employers with staff working for them in the UK are affected by automatic enrolment and, as a result, there are actions they’ll need to take.

Who will it affect?

Automatic Enrolment affects all employers who need to ensure a suitable pensions scheme is in place for all eligible workers.  As a bookkeeper it affects your clients who employ staff as they need to be aware of their duties start date (staging date) and ensure they have a pension scheme for their employees.  If you are in an employed position both you and your employer will need to pay into a scheme.

The Pensions Regulator (TPR) is the UK regulator of work based pension schemes and has a statutory duty to maximise employer compliance with the automatic enrolment duties. It does this through education and providing information and tools. It also has powers to take enforcement action, which includes fines.

What role will you play? 

Your clients may ask you to advise them and assist with some or all of their employer duties on their behalf. You can access useful information and resources to help you in the specific areas where your clients ask you for help which can be found here.

In addition, the majority of bookkeepers have previously said in research carried out by TPR that they expect to either help or be involved in their clients’ preparations for automatic enrolment.

Where do I start?

If you employ staff then you will need to know your duties start date (staging date) and work out what you need to do to meet your automatic enrolment duties on time.  To do this you can use The Pensions Regulator’s Duties Checker tool.

Here are some of the tasks you will be required to do.

  • setting up a pension scheme or modifying an existing one
  • making any necessary changes to payroll so it can handle the new requirements
  • putting systems in place to monitor the ages and earnings of your staff (your payroll may be able to do this)
  • writing to your staff (The Pensions Regulator has template letters which can be found here.

What is the declaration of compliance?

As part of the automatic enrolment duties, all employers will need to tell TPR what they have done to comply with the law. This is called a Declaration of Compliance. They need to do this within five months of the date their duties started – they risk a fine if they do not complete their declaration of compliance on time.

TPR has a Declaration of Compliance checklist, which details the information needed to complete the declaration.

If you are a business adviser and have several clients, then TPR has developed a tool which will enable you to save time by uploading a single file with multiple declarations. Clients’ details can be added to a single file and all of their records submitted together through TPR’s declaration of compliance file upload service.  Further information about this tool can be found here.

What do new employers need to do?

If you are thinking of employing someone for the first time or if you have a client who has recently become a new employer then you will need to ensure they know what they need to do to meet their automatic enrolment duties, and by when. They risk a fine if they do not comply with the law on time.

TPR has guidance and support to help find out exactly what new employers need to do and by when.

What is re-enrolment?

Every three years you must put certain staff back into a pension scheme. This is called ‘re-enrolment’.

Your re-enrolment duties must be carried out approximately three years after your automatic enrolment duties start date (staging date). Your duties will vary depending on whether you identify that you have staff to re-enrol, or whether you have no staff to re-enrol. Either way, you will need to complete a re-declaration of compliance to tell TPR how you have met your duties.

Remember, re-enrolment and re-declaration is your legal duty and if you don’t act you could be fined.

For further information on re-enrolment please click here.

The Pensions Regulator’s You Tube Channel

TPR has produced a number of short videos to communicate some key AE messages, aimed at business advisers, which can be viewed on TPR’s You Tube Channel – www.youtube.com/user/thepensionsregulator.

For more information please visit TPR’s website: www.thepensionsregulator.gov.uk

Other resources:

Pensions and Lifetime Savings Association – Pension Solution

Pension Solution has been set up specifically to help small employers through automatic enrolment.

It was launched by the Pensions and Lifetime Savings Association, a not for profit organisation uniquely positioned to offer impartial services, in October 2015. Membership offers a step-by-step guide for busy small business owners on automatic enrolment – from what needs to be done by when, to how much it will cost and which employees must be enrolled.

Pension Solution helps by providing:

1.          A step-by-step guide to automatic enrolment

2.         An impartial guide to pension providers

3.         Useful resources including handy templates and short films

IAB professional members and their clients can SAVE 100% (normal price is £49+vat for one year.) To access the discount code please login to the Members Area of the website and visit the Member Benefits section.

www.pensionsolution.co.uk