We’ve all seen the giant furry monster on TV who encourages us not to ignore the new workplace pension regulations. But we shouldn’t find ourselves getting distracted by Workie’s cuteness (yes, he has a name!), as the message he carries is very important. Soon it will be your turn to auto-enroll staff in a compliant pension scheme. For help getting started with the change, take a look at our brief step-by-step below:
You can begin the process by visiting The Pensions Regulator’s website to let them know of the most senior person in your business that will be carrying out the upcoming changes. You can also select a secondary contact, should you wish.
Their website will also be able to tell you the date from which your new pension scheme should be in place. This is called your Staging Date. It is very important to find out when your change-over is due as failure to auto-enroll on time can carry a hefty penalty of either £400 or an escalating penalty depending on your number of staff, ranging from £50 to £10,000 per day.
To stay on track, it’s good to have an idea of the pension scheme you wish to use. Our salon partners, the National Hair Federation (NHF), currently offer an auto-enrollment scheme to all hairdressing, beauty, salon and barber shops. For more information on this option, you can visit their website.
Any staff member who is younger than state pension age and older than 22, who earns more than £10,000 a year and is a UK employee, is entitled to your new auto-enrollment pension. When they join, it would be handy to give them details of their new pension scheme, along with what contributions are possible, how they are made and their right to opt out.
Don’t forget to tell any employees who aren’t auto-enrolled that they are able to join the scheme. You can also provide members who aren’t entitled to a scheme with a pension, although in this situation you are not required to contribute.
As an employer you currently contribute 1% of your employee’s salary to their pension every time they’re paid. Your employee is also required to pay a minimum of 0.8% which can be paid in by you. Why not pop a note in your diary to keep an eye on these figures though, as they will be rising each April for the next two years.
Once you’re set up, one of your final steps should be to let The Pensions Regulator know within five months of your staging date. Why not use this Declaration of Compliance Check List to ensure you have covered all bases. Remember, you will need to keep a folder of opt-out requests along with any business and employee information you used to auto-enroll your company at its staging date.