4 ongoing tasks to complete post your staging date.
The key to auto enrolment is good planning and whilst a lot of work goes into preparing for the staging date, it doesn’t end there. There is a lot to think about when it comes to auto enrolment duties and whilst SME owners can most certainly give themselves a big pat on the back for reaching their staging dates successfully, it doesn’t end there. The good news is that it gets easier and when you choose a good pensions provider to guide you, it needn’t be too daunting.
On reaching your staging date, you must enrol eligible employees and those who have asked to join the scheme. Following that, there are four key things you need to do to ensure you are keeping up with your legal obligations.
- Pay regular contributions into the pension
You must calculate and pay your contributions to the pension scheme on behalf of your staff, as well as calculating, deducting and paying your staff’s contributions. Make sure your payroll is set up to do this and run a demo to make sure it works.
At this stage, you will have already agreed your auto enrolment contribution rates with your pension scheme and when to pay them. Many employers opt to pay more than the legal minimum as in reality; the minimum is not enough to retire on comfortably. Many believe that this will aid in the recruitment and retention of employees. Companies that are seen to be fair or generous in their pension contributions are valued by their employees. Moreover, high turnover in staff can be far more expensive than contributing a bit more to their pension pots.
- Monitor the age and earnings of all your staff and any new joiners
You must monitor any changes in age and earnings of your staff so you can identify if any become eligible for automatic enrolment. You will also need to check eligibility of any new member of staff. Your payroll software should help you do this.
- Process requests to opt in or out of the scheme and keep accurate records
You should never actively encourage your employee to opt out (as it is also illegal to do so), but if they do so within one month of being enrolled, then you have to give them a full refund of the contributions they have made and stop payroll from deducting any further contributions immediately.
On the flip side, those who are not eligible might ask to opt in to the scheme. You will need to auto enrol them and make contributions. If they earn below £5,876 a year, then you can sign them up for the scheme but are not legally obliged to make contributions.
Make sure you keep water-tight records for all your staff, including those who have opted out and those who have been enrolled and when, information about their pension schemes and their contributions. This is your legal responsibility, and is not something that pensions providers will do for you. However, NOW: Pensions understands the administrative burden of this especially if you do not have a HR team and can keep these records for you.
- Re-enrol every three years
You don’t need to worry about this immediately. Automatic re-enrolment occurs every three years and is basically a repeat of the duties you carried out at your staging date. You must ensure that eligible staff who are not already in a pension scheme and can be auto enrolled, are.
All of this will become “business as usual” over time, but there is help out there. If you have selected a good pensions provider, you should be able to lean on them for guidance in order to avoid any penalties.