What is Automatic Enrolment?
The new workplace pension legislation requires firms to enrol their workforce into an automatic enrolment pension scheme (known as a ‘qualifying pension scheme’) and make contributions on their behalf. If you don’t, the Pensions Regulator may impose substantial fines. Auto-enrolment has proved to be time-consuming and technically complex, particularly around payroll compliance, making it difficult for businesses to comply correctly and on time. The staging dates for larger companies have already passed, and now it’s the turn of the smaller employers, who actually make up the vast majority of affected businesses. Staging dates for businesses with less than 30 employees start from June 2015 and run through until May 2017, and then new businesses set up since April 2012 are staging from May 2017 through to February 2018.
If you have an existing company pension scheme, such as a Group Personal Pension or a Stakeholder Scheme, it’s highly unlikely that this will be suitable for auto-enrolment, which means you’ll need to either choose a brand new qualifying pension scheme, or contact your existing provider to establish whether this can be adapted to comply with the new legislation. We can provide advice in this area if you need it.