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AUTO ENROLMENT SERVICES FOR BIRMINGHAM AND KENSINGTON, LONDON
Auto Enrolment has been introduced as people are living longer, there is pressure on the state benefit, and people are generally not saving enough for retirement.
According to research carried out by the Centre for Economics and Business Research who published an article in the Daily Telegraph newspaper it was quoted, that Auto Enrolment is likely to cost some business up to £28,300, and take up to 103 man days to administer.
The new legislation means that employers MUST enrol eligible employees into a work place pension, and they must contribute, (unless the employee decides to opt out).
Contributions for employers are as follows:
Up to 30/09/17: Employer contributes 1%
01/10/17 – 30/09/18: Employer contributes 2%
01/10/18 onwards: Employer contributes 3%
There are various staging dates for businesses according to the number of employees that they have, an example of which has been provided below: (Exactstaging dates will depend on the largest payroll and for employers with less than 50 staff, the PAYE reference).
Under 50 Employees – Enrol by 1st April 2017
50 – 53 Employees – Enrol by 1st April 2015
54 – 57 Employees – Enrol by 1st March 2015
62 – 89 Employees – Enrol by 1st July 2014
90 – 159 Employees – Enrol by 1st May 2014
Companies with more than 160 employees should already be fully compliant with this.
Failure to comply, will lead to an immediate fine of £400, and daily fines on top which increase as the size of the payroll increases.
1 – 4 Employees: £50 per day
5 – 49 Employees: £500 per day
50 – 249 Employees £2,500 per day
The penalties are even higher for companies with more than 250 employees.
How to avoid the penalties:
There are essentially 33 new pension responsibilities that need to be administered which fall under 5 disciplines (briefly described below):
- Choose a pension scheme: ensuring that this meets the needs of your employees.
- Assessing Workers: making sure that employees are eligible, and entitled to join the scheme.
- Communication: ensuring that appropriate and timely communication is sent out to employees, also making sure that employers do not coerce their employees into opting out, automatic re-enrolment every 3 years.
- Payroll Management: integration of payroll systems with pension providers, deducting and collecting pension contributions.
- Record Keeping: must be available for inspection by The Pension Regulators if requested, who can conduct an audit if they have reasonable grounds to do so (e.g. whistleblowing).
We have accountants ready to serve you in Birmingham and Kensington, London, UK.