Pension Auto-Enrolment - Know Your Clients Staging Dates
The Pensions Regulator has identified seven steps that employers should follow as they prepare for automatic enrolment.
|1. Know your (your clients’) staging date |
2. Assessing the workforce
3. Reviewing existing pension arrangements
4. Communicating the changes to all workers
5. Automatically enrolling ‘eligible jobholders’
6. Registering with The Pensions Regulator and keeping records
7. Contributing to workers’ pensions
Some of the UK’s largest employers have already started automatically enrolling staff into a pension scheme, and over the coming months and years all other employers will need to follow suit. By the beginning of 2018 all employers will be required by law to automatically enrol eligible jobholders into a pension scheme and to make contributions.
The first step to preparing for automatic enrolment is to know when the duties apply to you (or your clients). This is the employer’s ‘staging date’. Knowing this date will enable employers to make detailed plans to ready themselves to comply with the new duties.
An employer’s staging date is based on the number of people in their largest PAYE scheme on 1 April 2012 - regardless of any changes that may have happened between that date and now. A full list of staging dates is available on The Pensions Regulator’s website.
As an employer it is important to understand your PAYE scheme structure. Most employers will have one PAYE scheme that they use in relation to their workers. This PAYE scheme will be easily identifiable through their payroll systems. Larger employers may operate more than one PAYE scheme. If they do, the PAYE scheme with the greatest number of people in it will set the employer’s staging date. This means that the duties will come into effect on the same date for all the workers employed by that employer.
Some employers are part of complex corporate or group structures. To understand how staging will affect these structures, an employer will need to find out where in the group the workers’ contracts of employment are held. This will identify who, for the purposes of the new duties, the employers are within the corporate structure.
For more information on staging dates see detailed guide number 1 ‘Getting ready’ . Although small and micro employers will not reach their staging date until 2015 at the earliest, it is important that they find out their staging now so that they know when they will need to begin detailed preparations.
Employers should not underestimate the time needed to prepare for automatic enrolment. All employers can expect to make some changes to their existing processes in order to comply, and many employers will need to make changes in areas including payroll, human resources and IT. These changes will need to be planned, implemented and tested before the employer’s staging date.
Although all employers will have their own specific staging date, they can choose to bring it forward to an earlier date if they wish. Moving the staging date may be appropriate to bring the new duties in line with other business processes that occur during the year. The Pensions Regulator must be informed before an employer changes their staging date – this must be at least one month before the newly selected staging date, and can be done online.
For more information about the employer duties, click here.