A Quick Guide To The Auto Enrolment Process For Recruiters.
- You will need to find out your staging date for auto enrolment. To do this you will need your HMRC Employer’s PAYE Reference. The reference can be entered onto the Pension Regulator’s website and an instant staging date is given.
6 Months Before Staging Date
- You will need to select a pension provider/scheme and inform your Payroll company.
2 Months Before Staging Date
- You will need to ‘assess your workforce’ for those that are eligible/non-eligible/entitled to join the scheme. This data must be 100% accurate for the pension provider to accept and set up the individual employee schemes. Any errors in spellings, or incorrect/incomplete personal information will cause the data to be rejected.
- You are responsible for writing to all of your employees on their PAYE scheme and send introduction letters.
At Staging Date And Ongoing Weekly
- You will need to set up the pension scheme and auto-enrol all employees who have opted in or are eligible to join the scheme. You will also need to record those employees who have opted out to ensure no deductions are made from the offset.
- You will need to start making the pension deductions from your employees and provide pension reporting.
- The pension reporting will need to include weekly reports of the employee’s pension status (eligible, non-eligible or entitled), a summary of the deductions made and a change of personal details report. The reports provided to the pension provider are usually expected to be in csv format and in a particular order that will be unique to each pension provider.
- At the point an employee becomes eligible to join the scheme another communication letter must be sent to the employee stating that they have been auto enrolled.
- You will have to provide ongoing assessment of the client workforce to ensure all new starters are also enrolled once they have completed 12 weeks continuous service.
- You will have to track all employees that have chosen to opt-out as 3 years after their opt-out date they will be automatically enrolled again unless they choose to opt-out a second time.
- You are responsible for ensuring the employees that have chosen to opt out complete the correct form and that the form is sent to your payroll company.
- You are responsible for paying the pension contributions over to the pension company on a weekly basis.
3 Month Deferment
As many temporary agency workers will only be working for a short period, many will register with a number of different agencies and may only be employed by a particular agency for a short period. The auto-enrolment obligation applies to all workers who meet the age and earnings thresholds, but it is possible for employers to make workers wait for up to three calendar months before enrolling them into a pension scheme. If the worker has left before the end of the three-month period, then there is no need to provide that worker with a pension.
Failure to comply with any of the above, including the writing of letters to the employees, will result in you being noted as non-compliant with the Pensions Regulator and this can result in a fine of up to £10,000 per day until compliance is achieved.
Our Payroll Finance service for Recruiters provides all the management of the auto enrolment process on behalf of our clients.