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What is automatic enrolment and what are the rules? - Crowther Image

Following on from Ben’s 22 birthday at the weekend, he will now be automatically enrolled into the company pension scheme as this is a part of the criteria for automatic enrollment. Are you aware of the rules of automatic enrollment? And when your staff member’s need to be enrolled? This could be something that some companies don’t initially realise and could become a worry if not known.

Continue reading for all of these queries answered!..

What are my ongoing tasks to comply with the rules of automatic enrollment?

There are a number of ongoing duties that you must carry out if you have any staff members (other than directors) on your payroll.

Pension Assessment: You must monitor your staff by assessing them each time you undertake a pay run; you will need to assess their age and the amount they are being paid. If you have any staff who are aged between 22 and state pension age, and earn above £833 per month (£192 for weekly paid staff members) you have to enroll them into your auto enrollment compliant, company pension scheme. Once they are automatically enrolled you must both contribute to the scheme.

The current minimum contribution to the scheme is 8%, with at least 3% of this being an employer contribution. There are currently no intentions to increase this.

Managing opt ins: If you have employees that are under 22 or earn less than £833 per month, they can still request to be opted into the pension scheme, and have contributions deducted from their pay. If they are aged between 16 and 74 and earn over £512 per month (£118 per week) you will also have to contribute for them.

Managing opt outs: Once a member has been auto enrolled into your pension schemes, they can leave at any point by submitting an opt out request. You should stop deducting pension contributions as soon as possible but within 1 month at the latest. If they choose to opt out within one month of being enrolled into the scheme you must refund them any contributions, they have had deducted, you should also receive a refund from the pension company of all employee and employer contributions for that staff member.

Submission and payment of contributions: You must submit and pay over all contributions deducted from employees and contributions by the employer by the given deadline from your pension scheme (there is no statutory date but each pension scheme has their own deadlines). If these are not adhered to, the pension company is obliged to inform The Pension Regulator and you could be fined for non-compliance.

Finally, Re-enrollment: Every 3 years from your staging date or duties start date, you must re-enroll any staff members who have opted out of the pension scheme. As well as this you must complete your declaration of compliance to inform The Pension Regulator that you have assessed your workforce and completed any necessary re-enrollments. You must do the declaration even if you have no staff members to re-enroll.

Useful links for auto-enrolment with more information:

Crowther is more than happy to offer advice and assistance with any of the above or indeed any other matter relating to your employees.  Please feel free to contact jill@crowther.accountants or give her a call 01484 515544.

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