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Workplace Pensions are here, act now, it's the law

By The Pensions Regulator

Small employers are being warned to act now to ensure they are ready to meet their new workplace pension duties which will soon apply to them.

What is automatic enrolment?

All employers have a legal duty to automatically enrol certain staff into a workplace pension scheme by a deadline that is specific to them.  This includes small businesses – from chip shops, to florists to news agents and pubs.  The law also applies to employers who have one worker – for example a personal assistant. 

A national print and radio advertising campaign launched this autumn by The Pensions Regulator has called on employers to take action.  The message is simple: if you are an employer then you will have new duties.

Act now:

What do I need to do?

The Pension Regulator’s executive director of automatic enrolment, Charles Counsell said: “Tens of thousands of small employers will be required by law to automatically enrol their staff from June next year.  Smaller businesses may be more likely to leave things until the last minute which will put them at risk of enforcement action by the regulator.  The regulator expects that with significantly more employers subject to the new duties, it will use its compliance powers more frequently.

“Starting plans in good time however can help avoid the risk of non compliance.  Larger businesses which have already introduced automatic enrolment agree it’s wise to plan ahead and take a step by step approach.”

The essential guide to automatic enrolment:  

When do I need to do it by?

Your ‘staging date’ is the date the new duties come into force for your business. There are a number of tasks employers will need to do before this date however and the regulator recommends making a start 12 months beforehand.

Research by the regulator has shown that 20% of small employers and 40% of really small employers (those with up to 4 workers) do not know their staging date.  It is vital you do not guess your staging date – use the staging date tool on The Pension Regulator’s website, which only takes a few minutes (you will need your PAYE). 

Staging date tool:

Once you know your staging date, you can use the regulator’s handy time line planner tool (see below for link), which will help show what you will need to do and by when. There is lots of information on the regulator’s website, which has recently been refreshed to make it easier for small employers to use. 

Planning tool:

Please tell the regulator who’ll be responsible for automatic enrolment in your business to ensure you don’t miss out on important communications.

Nominate a contact:

You need up to date information about your staff and should check if any existing payroll arrangements are suitable for implementing automatic enrolment.  A pension and payroll system should be in place at least 6 months before their staging date. As thousands of employers will be doing the same it makes sense not to leave these tasks to the last minute.   

Five months after the staging date, employers must complete a declaration of compliance with The Pensions Regulator, this is a statutory requirement. 

Can I do it myself, or will I need extra help?

Recent research carried out by The Pensions Regulator suggests that increasing numbers of small and micro employers will be approaching their business advisers (accountants/IFAs/bookkeepers) to guide and support them through the automatic enrolment journey.

If you are thinking of asking your adviser for support, ensure you allow plenty of time (remember that they are likely to have other clients staging at the same time).  Also, make sure you are clear about the services they will offer you – and those they will not.

What happens if I don’t comply?

The responsibility for complying with the employer duties rests with the employer. The regulator has a range of powers to tackle non-compliance including serving fixed and escalating penalties notices.  If you fail to comply with your duties, the regulator may take enforcement action and issue a notice and/or a penalty.

Useful links:

Tools to get your started:

The essential guide to automatic enrolment:

Staging date tool:

Nominate a contact:

Planning tool:

6 month checklist:

Subscribe to TPRs news by email:

Published December 2014