SOSCN Documents - pensions. Copyright The Scottish Out of School Care Network 2017

pensions

Pensions and Auto-Enrolment

What is automatic enrolment?

The law on workplace pensions has changed. 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. NB Not all your staff may be eligible for auto enrolment- see later table.

Larger out of school care organisations may now have already set up a pension scheme and auto enrolment systems in order to meet their auto-enrolment duties for staff, however, many smaller services may not yet have acted and they must do so soon as this is the law. Even if you employ only one person this law applies to you or your organisation, for example, a childminder employing an assistant, or a person employing a carer, if meeting the age and earnings criteria.

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

Selecting a pension scheme for automatic enrolment guide

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

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.

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)

know your staging date

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.

provide a point of contact

3. Assess which categories of staff you employ for auto-enrolment

check who you need to enrol

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.

Monthly Gross EarningsAge 16 - 21Age 22 - SPA*SPA - Age 74Weekly Gross Earnings
£486 and lesshas a right to join a pension scheme 1£112 and less
£486 - £833has a right to opt in 2£112 - £192
over £833has a right to opt inautomatically enrol 3has a right to opt inover £192
Figures correct as of 2015/2016. *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 automatically enrol
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, in practice you should do this well in advance.


Next:

4. Create your Action Plan

This is a useful reminder of tasks and deadlines.

planning for automatic enrolment

5. Work out your costs

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.

DateEmployer minimum contributionTotal minimum contribution
Before 30/09/171%2% (including 1% staff contribution)
01/10/17 - 30/09/182%5% (including 3% staff contribution)
01/10/18 onwards3%8% (including 5% staff contribution)
The above link also provides a calculator to help you work this out which should be done at least 9 months before your staging date.

6. Check your staff records and payroll service or system is ready to administer the new scheme

What do you need to do?


7. Set up your pension scheme (see page 1) and then begin to complete a compliance certificate (see point 11)

Note, even if you already have an existing scheme, with all staff already enrolled, you still have to complete this, and this includes those using local government pension schemes.


8. At your staging date - assess and enrol your staff into the scheme


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

write to your staff

10. Your ongoing duties

your ongoing automatic enrolment duties

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

complete your declaration of compliance

The following resources have been created to help you complete your declaration


Disclaimer:

All of the information in this paper is taken from the Pensions Regulator (Mar 2017)

http://www.thepensionsregulator.gov.uk/en/employers/

We strongly advise you to use this for your own employer needs and circumstances. This paper does not constitute legal advice or pension provider advice it is an information resource and reminder of service's legal obligations on pensions.Direct web links often become quickly out of date therefore we advise bookmarking the Pension Regulator website and returning there often to check for updates.