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All employers have automatic enrolment duties – don’t ignore it. It’s the law!


To date, more than 8.5 million people have been automatically enrolled in a workplace pension by over 800,000 employers.

TPR recently published their annual commentary and analysis report, which shows that more than 70% of all new businesses will have staff they will need to put into a workplace pension. This means the majority of new employers will have full automatic enrolment duties and will need to set up a pension for their staff.

The estimates demonstrate how automatic enrolment has and will continue to reverse the decline in workplace saving. In 2012, 55% of staff were saving into a workplace pension and by 2016 that figure had increased to 78%.

In addition, a recent Mori poll commissioned by DWP also showed 83% of staff are pleased they are saving into a workplace pension and a similar number welcome an increase in contributions.

Start-up businesses
From October 2017, anyone thinking of taking on staff for the first time should start planning for their automatic enrolment responsibilities. As soon as they take on staff they will have workplace pensions duties.

Planning for automatic enrolment should be carried out alongside all the other tasks associated with running a business – for example setting up PAYE.

If an employer has eligible staff to put into a pension scheme, they will need to identify a provider and they should leave plenty of time to do this. They should also ensure their chosen payroll solution is compatible with their scheme so that staff receive the pensions they are entitled to on time.

Within five months of taking on staff, employers must complete a declaration of compliance to tell TPR what they have done to meet their duties.

Employers and their advisers should be aware that meeting their duties late or failing to set up a scheme as soon as they employ eligible staff, will not save them money.  This is because contributions will need to be backdated to the date they first employed staff.

On-going duties
Automatic enrolment is not a one off-task – employers also have on-going duties. This means they must continue to assess staff and keep records.

Every three years, employers must automatically enrol staff who initially opted out back into a workplace pension. They must then complete a redeclaration of compliance within five months of the anniversary of their staging date. Between now and the end of the year, 12,000 employers are due to complete their re-declaration of compliance.

Research shows that 96% of employers surveyed said they were confident they are successfully meeting their on-going duties. They also said that automatic enrolment was easier than they expected.

Useful links for you

For information and guidance on what employers need to do to meet their duties, and by when, visit www.tpr.gov.uk/employers.

Source: Darren Ryder, Director of Automatic Enrolment, The Pensions Regulator

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