It’s been more than a year since auto-enrolment was introduced but it still causing a headache for many employers.
The reforms designed to get more people saving hit the country’s largest employers first, with a gradual phasing in of the scheme from October 2012.
Millions of workers across the UK saw a slice of their pay packet automatically diverted into a savings pot for their pension.
Now auto-enrolment is being extended to smaller firms.
Those with fewer than 50 workers will need to start enrolling their staff from April 2015 which means it is time to act now.
Here are some facts about Auto Enrolment (AE):
- Employees (EEs) are eligible for AE if they are at least 22, below State Pension age, have qualifying earnings and work in UK
- If EE’s do not automatically qualify to be enrolled they can choose to opt into the scheme
- Also eligible EE’s can opt out after they have been automatically enrolled
- Contributions have to total 8% – that is 3% from Employers (ERs) & 5% from EEs once the scheme is fully operational by October 2018 and onwards – lower contributions are acceptable up until that date
- If EEs opt out they can choose to re-join later and ERs have to automatically enrol EEs back into the scheme every 3 years if they are eligible but have opted out
- Every Employer will be notified of their staging date by the Pensions Regulator. This has been determined based on the numbers of EEs in the PAYE scheme.
Auto-enrolment does mean more paperwork – and Barringtons is here to help you avoid hefty penalties for non-compliance.
Contact our Client Payroll Manager Sue Howie on 01782 713700.