Automatic enrolment (AE) is now business as usual for UK businesses.
More than 1.6 million employers have declared their compliance with automatic enrolment responsibilities and more than 10 million people are now saving into a workplace pension.
Below is an update from The Pensions Regulator which is is working to ensure employers continue to do the right thing so that staff receive the pensions they are due:
Research shows that the vast majority of new employers are successfully meeting their workplace pensions duties, however there are a minority who fail. HMRC supply us with RTI (real time information) data that we use to know whether an employer has taken on staff but failed to meet their workplace pensions duties and we will take action to ensure employers comply with their responsibilities.
Employers should ensure they keep their letter code to use in any communications with TPR.
Businesses who receive a letter from us, but who do not employ staff, should let us know so that they are not sent further communications. When choosing a pension scheme, employers should ensure they choose a scheme that’s suitable for their staff including considering what type of tax relief method it uses and ensuring it is compatible with their payroll solution.
Once staff have been automatically enrolled, employers must carry out on-going duties so that staff continue to receive the pensions they are entitled to. Our research shows on-going duties take less time and effort than employers anticipate, with most spending just one to two hours per month on them.
Ongoing duties include keeping accurate records, monitoring ages/earnings of staff, putting those who become eligible into a pension scheme and maintaining correct contributions.
As well as completing their on-going duties, employers must also periodically complete re-enrolment. Already more than 340,000 employers have completed their re-declaration of compliance to confirm to us they have completed this task. This summer we will see a peak of 140,000 small and micro businesses that will reach their first re-enrolment dates.
Low opt out rates mean that the majority of employers will not have staff to re-enrol, however they must still complete their re-declaration to confirm they have checked whether they need to re-enrol any of their staff, even if none were re-enrolled.
Re-enrolment is a two-step process. After re-enrolment has been carried out, employers must complete an online re-declaration of compliance. This confirms to TPR what the employer has done to meet their duties and failure to do this could lead to fine.
Business advisers: www.tpr.gov.uk/advisers