Automatic Enrolment – small businesses urged to act

As 2015 progresses, increasing numbers of small and medium sized businesses (SMEs) – those employing up to 30 members of staff – are getting closer to their automatic enrolment staging date, where they will be required to enrol staff into a workplace pension scheme.

Hundreds of thousands of small employers across the UK will have already received letters from the Pensions Regulator (TPR) telling them of their Automatic Enrolment duties as an employer. However many small businesses still don’t know what they need to do.

Research by Enrolsme, an Automatic Enrolment pension provider, questioned 200 small businesses who don’t currently offer a workplace pension, and 200 employees. The survey found that 31% of employers still don’t know what Automatic Enrolment is, and this figure increased to 37% in smaller businesses with 5-10 members of staff.

1.5 million Business yet to comply with Automatic Enrolment

The Pensions Regulator does seem to be attempting to do more to raise the profile of Automatic Enrolment and workplace pensions, but given the fact that around 1.5 million businesses are yet to comply, the lack of awareness at this current time a real concern.

Check who you need to enrol

Once you know your staging date and have provided The Pensions Regulator with the Auto Enrolment ‘Point of Contact’ for your business, you need to check which staff you need to enrol on to the scheme.

Which members of staff you need to enrol is determined by the amount you pay them and their age. There are three different categories that employees will fall into;

1. A right to join a pension scheme

You must provide a pension scheme for these employees, but you aren’t obliged to contribute.

2. A right to opt in

If these employees ask to join a pension scheme, you must put them in your automatic enrolment scheme and make the required contributions.

3. Automatically enrol

You must automatically enrol these employees into your pension scheme and pay regular contributions. You don’t need to ask their permission.

You should do this for all staff 9 months before your staging date. The Pensions Regulator website explains more on enroling staff here.

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