I became an employer in 2017 and currently employ 8 staff. Can you confirm what my obligations are in relation to work place pensions?
The government’s Auto Enrolment scheme is being phased in for all employers. Every worker who meets the eligibility criteria must be enrolled into a workplace pension if they are aged 22 or over, are under State Pension age, earn more than £10,000.00 a year and work in the UK.
You will have received correspondence from The Pension Regulator to notify you of the date your auto-enrolment duties commence. At this date you should assess all employees and those that are eligible must be enrolled into a qualifying workplace pension scheme.
All employers must let their staff know in writing if they are being enrolled into a workplace pension or not. Those who are not eligible will have the option to opt-in.
If you do not already operate a workplace pension it is important to commence preparations 6 months before your staging date to ensure you choose the most cost effective option. If you already operate a workplace pension, you must still confirm in writing to your employees that the pension meets the government’s new standards.
If an employee does not want to be in your pension, they can opt out within one month and receive a refund of contributions. If they choose to leave the pension after this no refund will be received.
The government has set a minimum percentage that has to be contributed by the employer. This will start at one per cent and increases to two percent from April 18 and three per cent from April 19.
These minimum percentages apply to qualifying earnings, what an employee earns over a minimum amount (currently £5,876) up to a maximum limit (currently £45,000).
The advice above is specific to the facts surrounding the questions posed. Neither PKF-FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.
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