Automatic Enrolment Pension Duties
Under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it. This is called ‘automatic enrolment’.
If you employ at least one person you are an employer and you have certain legal duties that begin on the day your first member of staff starts work. This is known as your duties start date. Even if you think you won’t need to put your staff into a scheme, you’ll still have duties. Duties can vary if the only member of staff is a Director working under a service agreement as opposed to an employment contract.
You must provide a pension scheme if you employ at least one person aged between 22 up to state pension age, and who earns more than £192 per week (£833 per month or £10,000 per year).
What you need to do as a new employer
- Choose a pension scheme.
- Work out who to put into a pension scheme on your duties start date.
- Write to your staff to tell them how automatic enrolment applies to them within 6 weeks of your duties start date.
- Declare your compliance to The Pensions Regulator (TPR) within 5 months of your duties start date.
- You need to deduct contributions from your staff’s salaries and pay these and your contributions over to the scheme no later than the 22nd day of the next month.
- You need to pay the correct contributions on time to your staff pension scheme. If you don’t, you risk being fined by The Pensions Regulator (TPR).
- There are specific records and payment information you must keep.
How much you must pay
The minimum contributions that you must pay into your staff’s pension scheme are shown in the table below – they’re currently a total contribution of 8% with at least 3% employer contribution.
|Date||Employer minimum contribution||Total minimum contribution|
|From 6 April 2019||3%||8% (including 5% staff contribution)|
You can delay ‘assessing’ your staff for up to three months. This is known as ‘postponement’.
Postponement does not change your duties start date, but simply the day you assess your staff’s age and earnings. If you use postponement you must write to your staff to tell them what you are doing. Find out if postponement is right for you.
If MATCH handles your payroll and pensions this is all taken care of. If not- feel free to get in touch to see how we can assist.
MATCH is working hard to keep on top of all the latest news and government support so, as always, feel free to get in touch if you have any queries and we’ll be happy to help.
MATCH Accounting Limited