Auto Enrolment

Auto Enrolment for Recruiters - it looks scary, but we can help

Posted: 18th August 2015

By 1st February 2018 every employer with at least one member of staff will have to enrol those employees who are eligible into a workplace pension scheme and contribute towards it. But for most employers auto enrolment will come a lot sooner, for instance companies with 40-49 employees will have to auto enrol their employees now. If you are a temporary recruitment agency all the workers on your books count towards the total.

You will get a letter from the Pensions Regulator informing you of the date you must start, this is called your ‘Staging Date’ or if you want to find out earlier then you can visit The Pension Regulator’s website.

The temptation may be to ignore it until it goes away.  Unfortunately it will never go away and there are severe fines (or even prison!) for those who choose to ignore the new regulations.  There will be costs to your business, because auto enrolment will take up resources, not just money, but time and staff.   You need to start budgeting and planning well before the staging date. 

How it all works

Before your Staging Date

Firstly, you need to find a suitable pension provider.  After analysis of the market and lots of long dull meeting we have found a partner that suits our needs and more importantly our clients’ needs.

Your workers will fall into various categories and each category will be treated differently.  The first thing we do is make an initial assessment of your workforce to decide who are eligible jobholders, who are non-eligible jobholders, and who are entitled workers.

Eligible Jobholders

  • aged 22- State Pension Age
  • working in the UK
  • earning above £10,000 (2015/2016)
  • Automatically enrolled 

Non-eligible jobholders

  • Aged 16 - 21 or State Pension Age - 74
  • working in the UK
  • earning above £10,000 (2015/2016)

OR

  • aged 16 - 74
  • working in the UK
  • earning above £5,824 but below £10,000 (2015/2016)
  • has the right to opt in to their employer's pension scheme.

Entitled Workers

These are employees who have a right to join their employer's pension scheme

  • aged 16-74
  • working in UK
  • earning below £5,824 (2015/2016)

The table below summarises:

 

SPA - State Pension Age

You will need to ensure that your payroll data is complete and accurate; poor and incomplete information will cause a lot of problems later on.    You should also have email addresses for your all your workers or have another way of making sure that they get the right communications at the right time.

At the staging date: 

1.       Communication to your Workers

You need to write to all your workers after your staging date to tell them how auto enrolment applies to them and to explain their rights. You must let them know that contributions will be deducted from their pay and that they have a right to opt out of the pension scheme if they wish to do so.

2.         Enrol your eligible jobholders

Once they have been informed you will need to enrol your eligible employees in the pension scheme.  It is vital that you keep detailed records.

3.         Complete the Declaration of Compliance and keep records up to date.

You will need to complete a declaration to the Pension Regulator that you have complied with your duties, this can be done online.  https://www.autoenrol.tpr.gov.uk/

It needs to be completed at the latest 5 months from your staging date.  But it includes information from your staging date so it’s worth completing as soon as possible after your staging date.   It’s worth reviewing the checklist (here) before you start the online form filling.  You will also need to maintain specified records about enrolled workers, their status within the scheme, the payment of contributions and the qualifying scheme itself. 

4.           Contribute to your workers pensions.

You must now contribute to your chosen pension scheme on behalf of your workers. The amounts you and your employees have to contribute to the pension scheme will be phased in over the next few years.  The minimum contribution requirement is shown in the table:

Phasing   Date

Employer   Contribution    % of earning

Employee   Contribution      % of earning

1st   Feb 2014 – 30th Sep 2017

1%

1%

1st   Oct 2017 – 30th Sep 2018

2%

3%

1st   Oct 2018 onwards

3%

5%

 

The whole process will probably cost you more than you anticpate and will take a lot of your time and resources.

That’s where we come in...

For our temporary recruitment clients we manage the whole process.  The set-up, the registration, the pension provider and ongoing management, we do the lot. We can also support you with HMRC Intermediary Reporting and to find out more click here.

For more information about our services for temporary Recruitment companies click here, or to enquire about how we can help you, please call Helena Cairns on 01908 268888 or email here