Businesses are warned that inspection teams will be making visits across the country over the coming months in order to confirm employers are meeting their auto-enrolment duties. The checks will began with London-based employers in March and have moved on to Greater Manchester. There will be more inspection in other towns and cities over the next month. These visits will enable inspectors to clarify any challenges being faced and how to resolve them. It will also highlight employers who are ignoring their duties and taking enforcement action against them.
What is automatic enrolment?
The law surrounding workplace pensions has changed. Every employer with at least on member of staff is obliged to ensure they have the correct automatic enrolment proceeds in place. This includes enrolling eligible staff onto a workplace pension scheme and making employer contributions. This scheme is called ‘automatic enrolment’ because for existing staff members, the process for joining the pension scheme is automatic.
Does automatic enrolment apply to you?
You will need to decide if automatic enrolment applies to you. If you have at least one member of staff, who is paid via a PAYE scheme, then you will have automatic enrolment duties to complete. There are exemptions available if the only employees are officers of the company. Whilst your accountant may be able to assist you by providing simple advice or a full automatic enrolment service, you as the employer will hold full responsibility for compliance.
If you were an employer on or before 1 April 2017, you will have received your tasks and duties confirmed. You should also have your staging date, this is the date from which you must be compliant.
If you have new employers from 1 October 2017
You will have tasks you need to complete in order to comply with your legal duties, as soon as you employ your first member of staff. If you have become an employer for the first time on or after 1 October 2017, you will have legal duties immediately. These duties will be applicable from the first day your first member of staff began working for you. This is known as your duties start date and you must ensure compliance straight away.
Automatic enrolment is a continuing responsibility for employers; your duties do not end at your staging date or duties start date.
As an employer, you must:
- Keep records of all your automatic enrolment activities for six years and opt-out notices for four years. This includes the names and addresses of staff you have enrolled, when contributions were paid into a pension scheme, staff opt-in notices, pension scheme reference or registry numbers and information sent to the pension provider.
- Monitor the ages and earning of all new and existing staff members, check their eligibility every month. As a member of staff becomes eligible, you must enrol them
- Enrol staff and inform that they know how automatic enrolment applies to them as they become eligible
- Pay contributions to their pension scheme.
The responsibility for meeting these duties lies with you as the employer.
Every three years you must put certain staff back into a pension scheme; this is known as ‘re-enrolment’. These duties must be carried our three years after your automatic enrolment staging date. Your responsibilities may vary depending on whether you have staff to enrol or if not. For both circumstances, you will need to complete a re-declaration of compliance to confirm you have met your duties.
Both re-enrolment and re-declaration are your legal duty as an employer. Failure to comply could mean you are fined.