Statutory Compulsory Pension Contribution Legislation came into effect from October 2012 and affects ALL employers withone or more employees upwards. It requires employers to make compulsory pension contributions and to auto-enrol mostemployees, with certain exclusions, into an appropriate pension arrangement.
It affects the largest employers first, rolling out to small employers between April 2015 and August 2017. The amount ofcompulsory pension contribution starts at a minimum level, rising to the required statutory minimum levels by October 2018.
The Pension Regulator has statutory powers to oversee this process and ensure all employers comply with this legislation.Failure to comply will be treated as a criminal offence, with the possibility of severe financial penalties, ranging from £50 to£10,000 PER DAY for non compliance.
All employers are required to carry out the following duties:-
- Assess their entire workforce
- Indentify who to automatically enrol
- Choose a pension provider(s)
- Register with The Pensions Regulator
- Make appropriate contributions
- Process relevant OPT-OUT notices
- Process relevant OPT-IN or JOINING notices
- Avoid inducements
- Keep ACCURATE records
- Provide all workers and other relevant bodies with information about pension changes
Not only is there a direct cost implication in respect of compulsory employer pension contributions, but there are additionalcost and time implications in managing the process and providing relevant reports to The Pension Regulator, proving you arecompliant with the legislation.
The new compulsory pension reforms have two important elements:-
- Compliance with the legislation
- Pension provision
To help employers with assessing the requirements to meet the legislation, Smith & Pinching have put forward an autoenrolment assistance programme. This service will deal with compliance in respect of the legislation and advice in respect ofpension requirements either from existing arrangements or if not qualifying for auto enrolment an appropriate alternative plan.
If you are uncertain about any aspect of the new legislation, or you would like some advice as to when you should start toimplement the required changes, please feel free to contact our pensions expert Paul Rayner on 01603 786812 or email himat [email protected]