What is automatic enrolment?
UK businesses that employ one or more employees have to put them into pension schemes if they meet certain criteria.
You must automatically enrol employees who are:
Aged 22 to state pension age
Working in the UK
Earning over £10,000 a year
Employees that don’t meet the criteria may also opt into the pension scheme; you must put them in if they ask.
What is going to happen?
You will receive a letter from the pension regulator which tells you your staging date, this is the deadline by which you need to start enrolling your employees into your fully compliant scheme.
You then have time to prepare:
set up a pension scheme or modifying an existing one
make any necessary changes to payroll so it can handle the new
Write to all employees telling them how they’ve been affected.
You must also provide certain information to the regulator about how you’ve complied with you duties.
If you do not comply
Inspections will be carried out, if you have chosen to ignore your duties there are enforcement options in place to ensure compliance.
Informal action – issuing guidance and instruction by telephone, email, letter or in person. A warning letter will also be sent out confirming a set time frame.
Statutory notice – these can direct you to comply with your duties, paying any contributions which have been missed or late paid with a possibility of interest being charged.
Penalty Notice – fixed non compliant with statutory notices £400, escalating penalties with daily rates from £50 - £10,000 depending on the number of staff you have. Civil penalties where you fail to pay contributions due, up to £5,000 for individuals and up to £50,000 for organizations
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