Welcome to our no-nonsense guide to Auto Enrolment. Over this sequence of 12 blog editions (1 per week) we’ll be guiding you through everything you need to know on the subject including what it is, how and why it affects you, how to prepare and the consequences of not being compliant with the new regulations.
A really important point we should get across right at the start is that unless you are a sole trader – this DOES affect you and your organisation, regardless of its size.
So what is it then and what do you need to know?
Well, the government has introduced new pension legislation for businesses. Under these new rules, employers have to automatically enrol eligible workers into a qualifying company pension scheme, if they aren’t already in one and make contributions into their pension pot.
We’ll be looking at who counts as an eligible worker later in this blog sequence, but essentially if an employee is over 22 and earns more than £10,000 per year – they’re eligible. Other’s outside of this bracket may be eligible too so it’s worth reading our “Who is eligible?” edition later on in the series.
When do the new rules come into effect?
They are already in effect and staging dates (dates by which organisations must be in compliance) have been set and will vary dependant on the size of the organisation. For the largest organisations, the staging date was back in 2012 and for the very smallest it may be as late as 2018. We’ll show you how you can find your staging date later, but don’t leave it until the last minute as it could take you as long as 12 months to prepare for it.
What happens if I don’t comply with the new regulations?
The Pensions Regulator is taking a pretty hard line on any organisation that does not comply and has significant powers to ensure compliance. Pleading ignorance is simply not be an option, nor is already having a pension scheme in place if that scheme does not meet the required standard.
Any organisation falling outside of the regulations will have to back pay into a pension scheme for the time it has not met the regulations in addition to paying escalating daily penalty notices of between £50 and £10,000 per day so get ready to start your preparations with our next edition to ensure you don’t fall foul of the new regulations.
We hope you found this useful, remember it’s early days and we’re still only skimming the surface! Next week’s edition – When do I have to be ready?
For more information regarding auto-enrolment, or if you’re just too excited to wait until next week visit www.credius.com or contact us directly by emailing email@example.com or calling 020 7562 5858.