The initial demands of automatic enrolment on employers are well-documented. But there are a wide range of responsibilities that continue well beyond your entry into the automatic enrolment process. Once the specific staging date arrives you have four months to register with the Pensions Regulator.
As part of this registration you will be asked for information on how you’ve fulfilled your employer duties. This is just the beginning of your pension responsibilities as an employer.
After you’ve registered with the Pensions Regulator:
Calculate payments and deductions
One obvious implication of pensions auto enrolment is the need to calculate, deduct and pay employee contributions towards the scheme. This needs to be a regular process that takes place alongside your usual payroll. You will need to:
- manage pensions data and calculate payments and deductions,
- make electronic payments to employees, and
- calculate your pensions liability.
Updating the Pensions Regulator
In addition to the pension payments you must make to your employees, you will need to provide regular reports and updates to the Pensions Regulator. Once again, you will need to maintain accurate records to send as part of your updates. You must:
- Keep records of payslips, summaries and reports.
- Keep up-to-date with both payroll and pension legislation to ensure complete compliance.
Future responsibilities and re-enrolment:
Continue to assess your workforce
Once automatic enrolment is complete you must continue to assess your workforce for auto enrolment according to certain thresholds including;
- A worker’s 22nd birthday,
- A worker’s 16th birthday,
- The first day of employment for a worker earning more than £10,000 a year.
Due to the age and wage-related triggers for the automatic enrolment threshold, you must continuously keep track of the changing circumstances within your workforce. You may need to create a personalised action plan according to best practice, gain an overview of the cost of automatic enrolment to your business and set up pensions for employees who reach the threshold.
From each trigger date you have just six weeks to provide information to the relevant employees about automatic enrolment. Make sure that your company does not breach the regulations set out by the Pensions Regulator.
Automatic re-enrolment every three years
In addition to individual triggers, you must re-assess your workforce every three years from your staging date. All eligible employees who have chosen to opt-out on a previous occasion must be automatically re-enroled. It is then the responsibility of that individual to opt-out.
You must provide these employees with the appropriate information on the options as at the initial staging date. Those eligible for re-enrolment must be given details on the scheme, what it will mean for them and their right to opt out. Those who are not eligible for automatic re-enrolment but who are eligible for self-enrolment must be given information regarding the possibility to opt in.
As with the initial communication prior to your staging date, the information must be provided in a range of formats and given directly to the employee. At this stage signposting to a website or poster does not represent sufficient communication.
Making sure all of the above is covered is crucial to ensuring you don’t breach any pensions legislation or you could be susceptible to a fine.