Workplace Pension auto-enrolment for new employers

From 1 October 2017, those who become employers for the first time are immediately in the workplace pension auto-enrolment system. Here are some key points to avoid making costly mistakes.

Pensions Regulator
The pensions regulator (TPR) is the public body responsible for regulating and enforcing compliance with the workplace pension scheme legislation. This has been phased in gradually but from 1 October 2017, anyone becoming an employer for the first time will need to comply with the legislation immediately.

Opt-Out
Auto-enrolment works on a strictly ?opt-out? basis. In order to comply with the rules, new employers must review workers to see if they are eligible or have a right to join/opt in to a scheme then send each employee a letter setting out their auto-enrolment rights. These must be sent out within six months and a scheme must also be set up in this timescale.

Note: From 6 April 2018 the employer?s total minimum contribution rises to 3% (total including employee?s contribution rises to 5%).

Director Only Companies
The auto-enrolment rules do not apply to companies where there is only one director, or where there are multiple directors but no more than one of them has a contract of employment.

Seasonal Staff
Auto-enrolment applies even to temporary staff taken on over Christmas and the New Year, though employers may be able to use postponement for any who won?t be working for longer than three months.

Failure by new employers to comply with legal obligations can see hefty fines imposed. For further information or advice just contact us.