Automatic Enrollment, Staging Dates
Auto enrollment –Does that make you to stop and think! Why? Should I? How?
Well, don’t worry! Here are few of your questions answered.
Why Auto enrolment?
Under the Pensions Act 2008, every employer in the UK must put staff who are earning over £ 10000 per year and aged 22 or over into a pension scheme and contribute towards it.
What is staging Date?
The staging date is the first date that an employer must comply with the legal requirements for auto enrolment
How to check the staging date:
It’s so simple, just click on the following link and enter the PAYE reference to verify your staging date.
Are you a new employer?
Staging dates for employers who set up after 1 April 2012:
|Date PAYE income first payable||Staging date|
|Between 1 April 2012 and 31 March 2013||1 May 2017|
|Between 1 April 2013 and 31 March 2014||1 July 2017|
|Between 1 April 2014 and 31 March 2015||1 August 2017|
|Between 1 April 2015 and 31 December 2015||1 October 2017|
|Between 1 January 2016 and 30 September 2016||1 November 2017|
|Between 1 October 2016 and 30 June 2017||1 January 2018|
|Between 1 July 2017 and 30 September 2017||1 February 2018|
What if my employee doesn’t want to join the scheme?
As an employer you are legally bound to auto-enrol your employees to a pension scheme. However, if the employee chooses to leave the scheme, he/she can do so after a month of enrolment. All they need to do is to complete a form from the pension provider, sign it and submit it to them. Employees can stop making payments after one month and any money paid by them previously will be refunded.
What if my employee wants to re-join after leaving the scheme?
Yes they can. They just need to get in touch with the pension provider directly or send them a signed letter, notifying their confirmation to re-join the scheme.
What happens when my employee leaves the scheme?
When your employee leaves the scheme, they will be put back into it at a later date (usually 3 years), as situations and choices might change. They will be contacted again to join and they can opt out if they wish to leave the scheme.
Do we have to contribute into the pension scheme?
Yes both will have to contribute. Employee will pay 1% and it will be directly taken from their pay checks and employer will pay 1% of employee earnings making a total of 2% in the pension pot.
Will this amount of contribution differ?
Yes it will fluctuate according to their income level. As of 6th April 2018 employee will pay 3% and employer will pay 2% of employee earnings.
What is Declaration of Compliance and when does it needs to be done?
Declaration of compliance is an online form that must be completed to let The Pensions Regulator know that you (employers) have met all the legal duties for auto-enrolment. The declaration must be completed within five months after the new staging date.
Hoping to meet you in the next blog, with more information and nuggets as to what happens if you don’t comply?.