SOSCN Documents - Pensions. Copyright The Scottish Out of School Care Network 2018

Pensions

Pensions and Automatic Enrolment

What is automatic enrolment?

Every employer with at least one member of staff now has new duties, including enrolling those who are eligible into a workplace pension scheme and contributing towards it. This is called automatic enrolment. It is called automatic enrolment because it is automatic for your staff – they don't have to do anything to be enrolled into your pension scheme, but it is not automatic for you.

You need to take steps to make sure your eligible staff are enrolled into a pension scheme.

In general, eligible staff are those aged 22 or over and under state pension age who earn over £833 a month (2018 rates).

However you must have a pension scheme in place for those not meeting that criteria who have a right to opt in, those from age 16 to state pension age earning over £503 a month, or, even if earning less, they would still have a right to join a pension scheme. (See table in point 3 below for more details).

Most OSC service will have already set up a pensions scheme, however, if you are a new service you will need to take steps to set this up.

If you do not yet have a pension scheme get advice here:

Guide (PDF) Selecting a good quality pension scheme for automatic enrolment

For employers selecting a pension scheme to use for automatic enrolment the government has set up a pension scheme called the National Employment Savings Trust (NEST) that all employers can use for automatic enrolment. Other providers can be found in links in the above guide.

www.nestpensions.org.uk/schemeweb/nest.htmll

Other points to note:

If you have not yet done so, is vitally important that you act now to:

1. Discover your staging date

This is when you must apply auto-enrolment to a pension for all relevant staff and make a pension scheme available for others to opt in or pay in.

Companies created between April 2012 and September 2017 will have staging dates allocated to them that fall between May 2017 and February 2018.

With effect from 1st October 2017, auto enrolment duties of new companies will start at the same time as their PAYE duties.

You may already have received a letter from The Pensions Regulator setting out this date, if not, you can find out here (using your employer PAYE reference number)

http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx
2. Appoint a relevant contact person

You should ensure this is someone with authority and access to relevant information on staff, pay, the pension scheme and administration and financial decisions.

http://www.thepensionsregulator.gov.uk/being-a-point-of-contact.aspx
3. Assess which categories of staff you employ for auto-enrolment

Your staff are people you pay via a payroll. You must assess them for automatic enrolment based on their ages and how much they earn, regardless of how many hours they work for you.

Figures correct as of 2018/2019. *SPA = state pension age

*1 Has a right to join a pension scheme if they ask you to, you must provide a pension scheme for them, but you don’t have to pay contributions.

*2 Has a right to opt in. If they ask to be put into a pension scheme, you must put them in your automatic enrolment pension scheme and pay regular contributions.

*3 Must be enrolled. You must put these members of staff in your automatic enrolment pension scheme and pay regular contributions. You don’t need to ask their permission. It is against the law to try to influence your staff into opting out of your pension scheme. You must carry out a full assessment of all your staff when you reach your staging date.

http://www.thepensionsregulator.gov.uk/checking-who-to-enrol.aspx

The pay reference period for the purpose of working out the eligible pay is tied to how you pay your staff, therefore if paid weekly, it is worked out on weekly earning, or 4 weekly or monthly and so on. For information on pay reference periods see:

http://www.thepensionsregulator.gov.uk/docs/dg-3-appendix-a.pdf

It is earnings on their employment with you that the limits are worked out, so if your staff have second jobs, or do not work for you in the summer, this is not aggregated together. The basic criteria are age and levels of earnings in your employment.

You might already have a company pension scheme which goes above and beyond such age and pay limits and that can be continued, the figures above are the minimum legal limits.

4. Work out your costs

One of your automatic enrolment duties will be to pay a regular contribution into your staff pension scheme. The table below shows the minimum amounts you'll need to contribute.

This link also provides a calculator to help you work this out which should be done at least 9 months before your staging date.

http://www.thepensionsregulator.gov.uk/working-out-your-clients-costs.aspx
5. Check your staff records and payroll service or system is ready to administer the new scheme
http://www.thepensionsregulator.gov.uk/checking-records-and-payroll-processes.aspx
6. Set up your pension scheme

If you have staff to automatically enroll, they will need a pension scheme. You will need to either set up a new scheme or check your existing scheme meets certain criteria.

7. Assess and enrol your staff

At your staging date, assess and enrole your staff into the scheme.

http://www.thepensionsregulator.gov.uk/assessing-and-enrolling-staff.aspx
8. Write to your staff

You must write to and inform your staff: this link includes letter templates:

http://www.thepensionsregulator.gov.uk/en/employers/duties-checker/outcomes/i-am-an-employer-who-has-to-provide-a-pension/write-to-your-staff.aspx
9. Your ongoing duties
http://www.thepensionsregulator.gov.uk/en/employers/new-employers/pension/i-am-an-employer-who-has-to-provide-a-pension/declare-your-compliance/your-ongoing-duties.aspx
10. Compliance Certificate

You are legally required to complete your compliance certificate by 5 months after your staging date.

http://www.thepensionsregulator.gov.uk/completing-the-declaration-of-compliance.aspx
11. Re-enrolment

Re-enrolment is the process where you must re-enrol certain staff into a pension scheme that can be used for automatic enrolment, if they’re not already active members of one.

It takes place every three years, and also happens on an immediate basis if a worker or the pension scheme meets certain criteria.

http://www.thepensionsregulator.gov.uk/en/employers/re-enrolment.aspx

The Essential Guide

Please see this link for the Pensions Regulator's essential guide for automatic enrolement.

http://www.thepensionsregulator.gov.uk/the-essential-guide-for-automatic-enrolment-Oct17.pdf

DISCLAIMER:

SOSCN is not responsible for the contents of external websites and this information is given in good faith as of the date the information was obtained (April 2018). This is not official legal advice, contact the agencies above to confirm any updates or changes to the rules.

last updated: 17/04/18