Small Business Auto-Enrolment Survival Guide

Small Business Auto-Enrolment Survival Guide

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  Auto- enrolment Your Survival Guide
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  02 Auto-enrolment. We know thatauto-enrolment can be one of the biggest challenges you as an employer will face. It’s brought a whole new level of regulations and challenges that you need to understand. But don’t worry we’re here to help, read our survival guide to help get you started. What do I need to do? As an employer, you need to offer your employees a workplace pension scheme that meets qualifying standards set out by the government. If you don’t, The Pensions Regulator could fine you. You may already be preparing for auto-enrolment, or you may not yet have started. Whatever stage you’re at, this survival guide will help. When do I need to do it? The date the new duties apply to you is known as your staging date. The earlier you start planning, the easier the process will be. We recommend you start preparing six months in advance of your staging date. If you don’t know your staging date, you can find this out from the Pensions Regulator How do I choose the right workplace pension for my business and my employees? The workplace pension scheme you provide will be a significant part of your employees’ remuneration package and a significant new cost for your business. Providing a good quality scheme that your employees can see real value in will help you to recruit, retain and motivate staff – therefore turning the scheme into an asset for your business. With hundreds of thousands of employers going through auto‑enrolment over the next few years, you need to ensure the provider you choose has both the experience and capacity required to support you during implementation and on an ongoing basis. As an employer, you need What Standard Life offers A qualifying scheme that is easy to set up You can easily set up your new workplace pension scheme online in six minutes. Easy ongoing management You can carry out all assessment, joining, payments and manage opt outs using our secure, online platform. We also issue mandatory communications to employees on your behalf, at no extra cost, saving you admin time and resource. A pension that your employees see the value in, and recognise it as part of their benefits package We provide a suite of personalised campaigns you can use to support employees, from being enrolled through to retirement, at no extra cost. A workforce who can retire when they want to Our interactive planning tools help employees plan for their financial futures. At retirement, they will have full access to all the retirement freedoms, meaning that from 55, they can take their money how they want to.
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  03 Employee category Actionrequired Eligible jobholders Earning at least £833 a month (£192 a week) and aged 22 – state pension age* You need to automatically enrol these employees into a qualifying workplace pension scheme** Non-eligible jobholders Earnings between £486 and £833 a month (£112 and £192 a week) and aged 22 – state pension age Aren’t eligible for auto-enrolment. However, they can choose to join a qualifying workplace pension scheme and receive employer contributions Entitled workers Earning less than £486 a month (£112 a week) and aged 16 – 74 Are ‘entitled’ to join a pension scheme but you don’t have to contribute into it for them Existing members Employees already in the scheme on a qualifying basis (paying at least minimum contributions) No joining action required Who do I need to automatically-enrol? Not all of your employees will be eligible to join your workplace pension scheme. It depends on their age, how much they are paid and if they already have a pension that you contribute to. Your employees will usually fall into one of the four different categories detailed below: What do I need to contribute? The Pensions Regulator sets the minimum contribution levels that employers need to meet. These are being phased in, which means they will increase in 2017 and then again in 2018. What are regulatory communications? You must write to each member of your workforce to tell them how auto-enrolment affects them. You must tell them about the contributions that are going to be deducted from their pay and advise them that they have the right to opt out of the pension scheme if they wish to do so. If you chose to use a postponement period you must also tell them about this. Option 1 – At least ‘basic’ pay earnings is pensionable Option 2 – Pensionable pay is at least 85% of total pay Option 3 – Total pay is pensionable Option 4 – Qualifying band Payment phasing period Employer Total (gross) Employer Total (gross) Employer Total (gross) Employer Total (gross) Up to Sep 2017 2% 3% 1% 2% 1% 2% 1% 2% Oct 2017 – Sep 2018 3% 6% 2% 5% 2% 5% 2% 5% Oct 2018 onwards 4% 9% 3% 8% 3% 7% 3% 8%
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  Standard Life Assurance Limitedis registered in Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. Standard Life Assurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. www.standardlife.co.uk GEN2584B    0815    © 2015 Standard Life, images reproduced under licence What is a postponement period? You can use postponement periods (also known as waiting periods) to delay some of your auto-enrolment duties by up to three months. However, remember that assessments still need to be carried out each month from staging and on the last day of postponement to establish if an employee needs to be automatically enrolled. Also, employees still have the right to opt in even during the postponement period. Postponement periods can be used to: ¬¬Align pension joining dates, and/or the opt out period, with the payroll process ¬¬Avoid joining temporary employees ¬¬Fit in with pay reference periods meaning employees join the scheme at the start of a pay period saving you time as well Why is it important to have the right data Ensuring that you have accurate and up to date data is an essential part of your auto-enrolment duties. It will also make it a lot easier for you. Top tips for data success ¬¬Think about carrying out a review of your payroll processes and meet with your payroll provider early on in the planning stage at least six months ahead of your staging date, to establish how your processes and their products work together ¬¬Think about the size of your workforce in relation to your new duties and how much time you are going to set aside to fulfil your duties ¬¬Establish how you’re going resource the new duties ¬¬Standardise the data so it can be sent to the payroll provider or the pension provider if required ¬¬Consider your needs especially if you have both weekly and monthly paid staff ¬¬Don’t underestimate how long data processing can take – allow sufficient time to comply with the regulation