Employers' Mandatory Pension Registration
All employers will have to consider the 7 steps issued by the Pensions Regulator as they prepare for automatic enrolment
• Know your staging date - when to act
• Assess your workforce
• Review your pension arrangements
• Communicate the changes to all your workers
• Automatically enrol your 'eligible jobholders'
• Register with The Pensions Regulator and keep records
• Contribute to your workers' pensions
When to act? This is dependent on your number of employees, but employers will need to have considered how they can comply with the registration process, including how changes to existing pension scheme rules apply by the announced staging dates, which are as follows:
• businesses with more than 3,000 staff have a staging date on or before 1 July 2013
• businesses with 50-2,999 staff will have a staging date between August 2013 and March 2015.
• businesses with 49 staff or fewer will begin automatically enrolling their staff from May 2015.
By the above dates employers will have had to amend existing pension scheme rules or established a new company scheme and will have registered their scheme online with the Pensions Regulator.
Employers will need to ensure that their pension scheme offering complies with a number of conditions including that a new starter is eligible to join an employer pension scheme from their first day of employment.
Employers will also need to contribute to the scheme with the minimum contribution being 3% of earnings and the employee contributing the remainder with the minimum total combined contribution being 8%. However this is phased in over the staging dates starting at 1% from the employer and a total combined minimum contribution of 2% to 30 September 2016, rising to 2% employer and a 5% total combined minimum contribution between 1 October 2016 to 30 September 2017 and then reaching the final minimum total combined contribution of 8% from 1 October 2017.
In its detailed guidance the Pensions Regulator has provided two useful flowcharts that highlight the steps that are required to determine if schemes are eligible and if they can be used to fulfil employers’ automatic enrolment obligations. Appendix B of the pension schemes detailed guidance highlights the steps to take to determine if your defined benefit (DB) pension scheme is a qualifying scheme while Appendix C highlights the steps to take to determine if your defined contribution (DC) pension scheme is a qualifying scheme.
Click here to see articles and further guidance from the the Pensions Regulator.
If you are currently preparing business and project plans you may wish to make sure your plans and cashflows reflect the changes.