It is a legal requirement to automatically enrol employees in an approved Pension Scheme for Automatic Enrolment where their pay exceeds the Lower Earnings Limit.
Automatic Enrolment Duties do not apply to Directors.
Currently employees must contribute 5% of their salary and employers must contribute 3% of salary.
Eligibility
If employees are above 22 but under state pension age and earning above the lower earnings limit monthly, then you will need to set up a scheme.
Choosing a Scheme
You should choose an eligible workplace scheme as soon as possible. NEST is the Government run scheme that most employers use. There are no fees (currently) for using the NEST scheme.
Other schemes such as Smart Pensions or Workplace Pensions Direct are available. These may incur charges for scheme management.
We are able to assist with set up of your scheme.
Enrolling staff
Employees will need to now be enrolled onto the scheme if they meet the automatic enrolment criteria.
They will need to be issued with a letter detailing the scheme and their enrolment.
Staff who do not wish to be part of the scheme will need to be automatically enrolled and choose to then opt out of the scheme. They cannot simply not join in the first place.
Declaration of Compliance
Once the scheme has been set up and employees enrolled, the Declaration of Compliance should be completed with the Pension Regulator.
Automatic Enrolment Submissions
As part of the monthly payroll, we will automatically process automatic enrolment contributions and arrange for the schedule to be uploaded to your pension provider. The pension provider will take the payment for automatic payment contributions by direct debit following submission.
Redeclaration of Compliance
Every 3 years, employers need to re-enrol employees into the payroll scheme, even if they have opted out. The redeclaration of Compliance then needs to be submitted to the Pensions Regulator.
Employee Opt in or Opt out
Employees who do not meet the automatic enrolment criteria are able to “opt in” to the scheme by request. Employees enrolled into the scheme but wishing to leave are able to “Opt out” to cease membership.
Ascentant Accountancy are Accountant’s based in Derby who specialise in working with Small Businesses across the Country – Get in touch on 01332 981920 or info@ascentant.co.uk to discuss your needs.
We can be found at Suite 5 Keynes House, Alfreton Road, Derby, DE21 4AS.
