Do you as an employer understand your legal responsibility when it comes to Auto Enrolment?
More than 5.4 million workers have been automatically enrolled into a workplace pension by almost 61,000 employers by 2012. By the time the process is complete in 2018, it is estimated that around 9 million workers will either be newly saving or saving more into a workplace pension thanks to the policy.
The latest round of advertising from The Pensions Regulator (TPR) focusses on ‘micro’ employers; such as families who hire a nanny or a Ltd company with one employee other than a Director. Furthermore, the same rules apply to these employees as to those from bigger businesses. If you don’t enrol them into a suitable pension scheme – you will be liable for a fine from TPR. Around 26,000 late compliance notices have been handed out. However, only 5% of these have escalated to tribunal stage. Reasons given for non-compliance include a member of staff being ill, relying on someone else to do the work, not receiving any information and companies making a mistake. For clarity, none of these are valid reasons and will not count in your favour at a tribunal!
Avoid the fine
First of all, the only way to avoid a fine is to ensure you are ready to enrol your employees in time for your staging date. We advise a minimum of 6 months preparatory time to look into your options and discuss with your employees the process and your plans. Below is a reminder on the enrolment criteria:
- Aged between 22 and state pension age.
- Earn at least £10,000 a year.
- Work in the UK.
Now, for more information on Auto Enrolment or to have one of our advisers present to you and your employees; please email [email protected] or call 01273 208813.
Our Auto Enrolment key fact guide can be found here.
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IEP Financial is authorised and regulated by The Financial Conduct Authority (FCA)
The value of investments can fall as well as rise and past performance is not a guide to the future. The content of this publication is for information only. It does not represent personal advice or a personal recommendation, and should not be interpreted as such. Please do not act upon any part of it without first having consulted an Independent Financial Advisor.