If you run a small business you are likely to have received a letter from the Pensions Regulator with details about your employer staging date for auto-enrolment. Over 1.5 million letters have now been sent out to small businesses with details of your PAYE reference and staging date. It will also ask you to provide a nominated contact for all future communications with the Pension Regulator.
If there are no employees other than a sole director you are likely to have received a letter explaining that you are exempt from auto-enrolment. More detailed guidance can be found on the Pension Regulator website but employers should be aware that there are minimum contributions which are detailed below:
- From employees staging date to 5 April 2018 – Employers (1%) plus employees (1%)
- From 6 April 2018 to 5 April 2019 – Employers (2%) plus employees (3%)
- From 6 April 2019 – Employers (3%) plus employees (5%)
There are specific rules about notifying employees of the changes and how to deal with the process of an employee opting in or out of the scheme. As an employer doing nothing is not an option as penalties are incurred for non-compliance. It is important that you understand the processes that are involved or work with someone that can help you implement auto-enrolment for your workforce.
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This post was written by Tim Sperrings