Don’t panic about your pension responsibilities, writes Jono Wilson of Barnett & Turner. Start planning ahead. If you’re running a small business, the chances are you will have heard from the Pensions Regulator by now about your staging date for auto-enrolment. Although SMEs have been given extra leeway, the time is now fast approaching when you’ll need to spring into action.
The process starts by nominating a primary point of contact (usually a partner, director or someone else in a senior position) and a secondary contact who’ll handle the day-to-day operation of the scheme.
It’s important to remember that penalties can eventually rise to as much as £50 a day or more if you’ve failed to act, so there’s a strong incentive to start making preparations.
Here’s my 10-point action plan, which should see you through the initial process and ongoing administration.
- Define and set-up your scheme.
- Assess your workforce for eligibility.
- Send letters to all your workers, providing details of the scheme, the contributions that will be made and the start date.
- Enrol all workers into scheme.
- Manage opt-outs and timely refunds.
- Enrol new starters as well as postponements.
- Calculate and pay over contributions.
- Complete an auto-enrolment declaration of compliance, within five months of the scheme starting.
- Keep up-to-date records.
- Auto re-enrol all eligible job holders every three years.
To be ‘eligible’ in the eyes of the Regulator, an employee must be over 22, but under the state pension age, and earning more than £10,000 per year. It is possible, however, for other people to choose to join the scheme and, as an employer, you may still have to make contributions.
If you have between 30 and 49 employees, your staging date will be between 1st August and 1st October 2015. If you have fewer than 30 staff, the date will depend on your PAYE reference, but can range from 1st June 2015 to 1st April 2017. Whatever your own situation, get the ball rolling by speaking to your accountants and find out exactly what support they’re able to give you.
If you would like to discuss anything related to this article please do not hesitate to call Barnett & Turner on 01623 659659 or email Jonathan at firstname.lastname@example.org