Know your staging date

Firstly, you should already know your staging date for when you need to have an auto enrolment pension scheme set up, but if not it takes just a few minutes to find out what it is via The Pensions Regulator's Duties Checker.

Millions of employers have already met their staging dates since automatic enrolment legislation was introduced in 2012. Last summer, businesses with fewer than 50 employees began to reach their staging dates and were duty bound to enrol their staff onto a pension scheme.

The Pensions Regulator estimates that nearly 150,000 small businesses will have to enrol their staff onto a pension scheme in the months until March 2017 and are urging employers to act now, lest they face stiff penalties.

Threat of daily fines for non-compliance

Penalties are no idle threat. The Pensions Regulator recently reported that it had issued 3,057 compliance notices, 806 fixed penalty notices (£400 fine) and 96 escalating penalty notices from 1 January to 31 March 2016. Escalating penalty notices see businesses hit with a daily fine for non-compliance. This is worked out by virtue of how many employers a business has:

• 1-4 employees - £50 daily fine
• 5-49 employees - £500 daily fine
• 50-249 employees - £2,500 daily fine
• 250-499 employees - £5,000 daily fine
• 500 or more employees - £10,000 daily fine

Key messages from the Pensions Regulator

Charles Counsell, Executive Director of The Pensions Regulator wrote a blog last month encouraging employers to meet their obligations and set up their auto enrolment pension schemes.

In it, Charles explains that auto enrolment is “all about helping people save for their retirement, so that they have a dignified standard of living that meets their expectations about how they may wish to live.”

“I understand that some may not embrace their role in this pensions revolution,” writes Charles, “and we have been trying to simplify things for small employers as much as we possibly can. The reality now is that every week thousands of new employers are complying with the law.

“Significant challenges lie ahead with huge numbers of small and micro employers still to act. Between now and the end of the year we will be sending out nearly a million letters to employers alerting them to their new duties. These all come from me.

“If you are one of the one million or so employers whose duties are still to come, look out for one of my letters and please do take action and prepare early. Automatic enrolment is not a one off event, it truly is changing the landscape of saving on a daily basis.”

More advice from The Pensions Regulator

Using a business adviser for automatic enrolment? Make sure you are clear about who’s doing what

Completing a declaration of compliance is one of a number of tasks to do as part of your automatic enrolment duties. Failure to complete and submit the declaration of compliance to The Pensions Regulator could result in a fine. 

One of the reasons given by employers for missing their declaration of compliance deadline is that they thought that somebody else was completing this on their behalf. It is the employer’s legal responsibility to comply with automatic enrolment. You should know when your declaration of compliance deadline is and ensure that it is completed on time.

For more information and to complete the declaration, click here.

Is your payroll software compatible?

In order to make pension contributions into a workplace pension scheme on behalf of your staff, you will need to regularly exchange information between your payroll software and your chosen pension scheme provider. 

It’s important to check if your payroll or process will work with your chosen pension scheme to allow easy transfer of data between the two.

For more information, go to The Pension Regulator website.

Do you employ seasonal or temporary staff? Automatic enrolment duties will apply

If you employ seasonal staff over the Christmas period, or you have staff whose pay and hours fluctuate, then you still have automatic duties. You will need to take into account

• Their varying earnings and hours
• That they may join and leave your employment in the middle of pay periods

For more information on dealing with seasonal workers, including checking your software and using postponement, go to The Pensions Regulator website.