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Dealers urged to prepare for obligatory pension law

Dealers are being urged to ensure they are aware of their obligations regarding the new workplace pension law.

For the first time employers are required by law to automatically enrol their eligible employees into a workplace pension and make a contribution to it.

The pensions regulator is responsible for ensuring maximimum employer compliance with the new law and has produced guidance to help employers  do this.

The Government introduced the change because research showed millions of people are currently not saving enough to have the income they are likely to want in retirement. Life expectancy in the UK is increasing and at the same time people are putting less into pensions.

More than one thousand large employers (those with 250 plus employees) have now automatically enrolled their staff into work based pension schemes and medium (50 to 249 employees) and small employers will in due course be required to do the same.

More than 1.4 million additional people have already started saving into a workplace pension.  

Whether automatically enrolling their staff, or providing information about pensions, every employer will be affected by the changes. 

Eventually up to nine million individuals could be saving more, or saving for the first time into a pension.

The pensions regulator is providing information to help dealers prepare for the date when their duties go live. For medium and small businesses this is from August 1, 2015 to April 1, 2017.

The regulator also has a rolling programme of direct employer communications. This includes letters, emails and phone calls aimed at helping employers.
  
Information linked to employers' PAYE dictates when an employer’s staging date will be.

A pension regulator spokeswoman said: "It is determined by the number of persons in the employer’s largest PAYE scheme, and is wholly based on data held by the regulator from HMRC on April 1, 2012.

"The regulator is still finding many employers are unsure of their staging date we strongly recommend employers check the date by entering their PAYE number into the tool on our website.

"Employers cannot delay their staging date as this is set by law. An employer can bring forward their staging date, by meeting certain conditions one of which is notifying the regulator at least one month before the new staging date. Once an employer has brought forward their staging date they cannot revert to the original date."

She said preparing for automatic enrolment can be challenging if employers do not allow sufficient time to prepare. 

Larger employers that have been through the process tend to have more complex workforces and systems to adapt – but they also have prior experience of providing workplace pensions, and their own in-house specialists.

To help smaller employers prepare for automatic enrolment the regulator has developed an online tool which shows key activities and suggested timescales.

Further help is available at a 'hub' on the regulator’s website which ensures a range of useful detailed information and resources about all aspects of automatic enrolment is easy to locate.

Choosing a pension scheme and software

The regulator has published information to help employers with pension scheme selection. 

http://www.thepensionsregulator.gov.uk/employers/choosing-quality-pension-scheme.aspx

"As the number of employers due to automatically enrol workers increases, it's even more important for organisations to plan ahead. We would recommend agreeing with a provider on your scheme choice a provider at least six months in advance of staging. Leaving it too late may restrict an employer’s options or mean that they cannot find a scheme in time. This could make preparations more costly, and complex. 

"Employers should automate as much of the process as possible, including workforce assessment and review their payroll and other business software to ensure it is fit for purpose. Again, it’s recommended that employers do this six months in advance of their start date," the spokeswoman said.

To be compliant, all employers need to complete the registration process with the regulator within four months of staging. Employers can start the online registration process early by partially completing registration before their staging date.

Enforcement

Find out more about automatic enrolment, including the enforcement strategy and details of potential penalties for employers who do not comply with their duties: www.thepensionsregulator.gov.uk/automatic-enrolment.aspx


 

 

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