Pension guidance

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aUTUmn 2016 PENSIoNS GuIdANCE duty calls: auto enrolment and small employers You will probably have seen the large, multicoloured character, Workie, being used in new workplace pension adverts, calling on small employers to be aware of their duties. This is because from 2017, all employees aged between 22 and State Pension age and who earn more than 10,000 a year have to be enrolled into a workplace pension scheme by their employer, who must contribute to their pension. This process is called auto enrolment. Many small and micro businesses reach their workplace pension staging date this year, so need to put in place processes to ensure they comply with the legislation. If you do not have any workers eligible to be put into a pension, you still need to write to them and explain why auto enrolment doesnt apply to them Smaller firms generally believe auto enrolment will be good for their staff and that workers should save for the future, but many are still unclear what they need to do and by when, and how much it will cost. So as an employer, you may now be wondering what to do next. Even if you have only one member of staff who is employed on a temporary basis, earns less than the qualifying earnings threshold of 10,000, and who does not need to be automatically enrolled into a pension scheme you will still have duties that you need to meet. Its important that you are aware of what these are and when you need to meet them by, as you may incur a fine if you do not comply with the law in time. When legal responsibility begins The Pensions Regulator (TPR) writes to all employers 12 months before their staging date, to alert them to their duties. The staging date is when an employers legal responsibility begins. Go to TPRs website, and take five minutes to complete the online Duties Checker. This will help you to understand how the law applies to you, and what you have to comply with and by when to avoid a fine. PoPUlar qUESTIonS Q: I do not have any staff to put into a pension scheme can I bring my deadlines forward? Yes, you can bring forward your staging date and complete your declaration of compliance early. If you plan to bring your staging date forward, you must notify The Pensions Regulator. Q: Were a family business do auto enrolment duties apply to us? Whether you have duties will depend on your roles and if you have employment contracts in place. To find out if you have auto enrolment duties, and what to do if you do not, complete the Duties Checker on TPRswebsite. Q: Im the only director of my own company do auto enrolment duties apply to me? If you are the sole director and have no other staff working for you, the company does not have auto enrolment duties. You will need to tell TPR that youre not an employer you can do this by completing the Duties Checker on TPRs website. your duties as an employer You are an employer if there is a contract of employment written or verbal between you and those who work for you. Even if someone who works for you considers themselves to be selfemployed, you may still have employer duties. deciding who is a worker will be clear-cut in many circumstances, but it can be more difficult in others. A person may be a classified as a worker if they meet a number of criteria, including: l Whether you expect them, personally, to carry out work for you l If you provide what they need to do the work for example, tools l If you bear the financial cost of faulty work once you have decided who is a worker for auto enrolment purposes, you must check if any of them need to be put into a pension scheme. If you decide you are not an employer for example, yours is a sole-director company with no other staff and that you donot have duties, you should use the Duties Checker to let TPR know this is thecase. If you do not have any workers eligible to be put into a pension, you still need to write to them and explain why auto enrolment doesnt apply to them. Template letters are available on TPRs website. Complete and submit a declaration of compliance Whether or not you have workers who must be put into a pension, you need to complete a declaration of compliance and submit it to TPR. This shows what you have done to meet your duties and must be completed within five months of your staging date if you dont do this on time, you may incur a fine. Bringing your staging date forward If you dont have anyone who needs to be put into a pension scheme, you can bring your staging date forward to any date, so you can meet your duties at a time that suits you. You will need to tell TPR that you wish to do this on or before your new staging date, and youll need to provide all of the information below: l Your PAYE reference, found on letters from TPR about auto enrolment l Your letter code a 10-digit reference that appears on correspondence from TPR about auto enrolment l Your current staging date and your new staging date l Employers name, address including postcode and email address l Your Companies House registration number (if you have one) or equivalent for example, registered charity number, VAT registration number, or industrial and provident society number Complete your declaration of compliance at the same time You can choose to complete your declaration of compliance at the same time as you bring forward your staging date. Completing your declaration early means you get it out of the way and not think about it any more. If you decide not can to do this, you must complete your declaration within five months of your new staging date. Businesses can use the staging-date calculator to check if, and when, the new law applies to them. HElP WITH aUTo EnrolmEnT The Federation of Small Businesses (FSB) recently ran a day of auto enrolment workshops for its members, which was attended by more than 70 firms. It is planning another series of free events on Wednesday 2 november 2016 and Wednesday 8 march 2017 click here to register. The FSB has also established a workplace pension product for its members, specifically designed to help small business owners meet their auto enrolment obligations. members receive: expert guidance to help them get to grips with the legislation and what it means for their business; free access to company pension scheme administration software; online support to manage every aspect of compliance; a dedicated phone helpline; and flexible transfer and consolidation options for themselves and their employees. Its hassle free and simple to set up, and the costs start at only 399 plus VaT. For more details, visit Credit: Linsey Luke Federation of Small Businesses twitter declare your compliance on time Make sure you know what you need to provide to @TPRgovuk to show you are meeting your #autoenrolment duties. TPR offers guidance on completing the declaration of compliance. Credits: Angela Bell and Linsey Luke Images: Tashatuvango / Shutterstock There are two key #autoenrolment dates you need to know: your staging date and your declaration of compliance deadline date. For further information please contact your local Trading Standards Service