If you are an employer, then you are required by law to provide a workplace pension scheme for all your eligible staff. If you became an employer after the 1st of October 2017 then you must automatically enrol staff into a scheme, whereas if you were an existing employer at this time then you should have been notified of the applicable start date (known as the staging date) for your business.
Setting up a pension scheme can be a daunting task if you have never had to do it before. Pensions can be a complex area to navigate if you have no experience and it can be particularly tricky for a small business given all the other requirements on you as an employer, not to mention the actual day-to-day running of your business. It can be beneficial to get a specialist involved in managing it all for you so you can focus on everything else you need to do.
A few things you need to know about auto-enrolment:
You must determine what is included in employees’ earnings
There are three types of earnings that are classed as pensionable salary and you need to decide which definition you will use. They include:
- Total pay: this includes salary, bonuses, overtime pay, and any benefits (such as health insurance)
- Basic pay: this covers the base salary only, excluding bonuses and benefits
- Qualifying earnings: this calculates the pensionable salary based on the top and bottom limits of National Insurance
You must select a pension provider
There is a large number of pension providers on the market offering a range of options and services to clients. As well as understanding the basics of what is involved in setting up a pension scheme you also need to be able to understand what each pension provider offers and what their charges are before deciding which one is right for you. With the new rules coming into force pension providers will become quite busy and some may even reach capacity and be unable to take on new business.
Communicate the changes to your staff
Once you have determined what constitutes earnings and which pension provider you are going to go for you need to let you staff know what changes are being introduced and how they will be affected. Although you are only legally required to send out a single communication to staff, the reality is that you will be faced with questions and uncertainty so it is worth considering an engagement strategy. This could include a variety of channels as well as follow-ups to ensure that all affected staff have been informed and understand what it means for them.
Do you need help?
Consider early on whether this is something you want to manage yourself, or if you want to get help from a specialist. An expert working in this field will be up to speed on all the details and requirements that will affect you and be able to advise on the right providers who can meet those needs. They can also help you communicate changes to your staff and answer any questions they may have, allowing you to focus on running the business.
For advice and guidance on auto-enrolment or for details on how we can assist, just ask our team at Cain and Co by calling us on 020 8087 1341 or emailing us at takecontrol@cainandco.co.uk.
