Employers urged to plan for automatic pension scheme enrolment
Posted: 6th March 2014
The Pensions Regulator has urged employers with a complex workforce to learn from those who have already automatically enrolled workers and ensure they leave enough time to carry out their plans.
Under changes to pension laws, all employers must automatically enrol eligible workers into a work based pension scheme. Eligible workers are those who are over 22, have not yet reached pensionable age, earn more than £9,440 per year and ordinarily work in the UK.
When an employer becomes subject to the automatic enrolment duties, all of their workers must be assessed. For workers who are paid a regular, non fluctuating amount, the process is straightforward. Assessing workers whose earnings fluctuate is more challenging and can take longer.
Employers with workers who have fluctuating earnings have reported it is essential to leave enough time to gather the correct data and assess the workforce. Leaving this to the last minute can cause delays and risks non compliance.
Some of the business sectors likely to employ workers with fluctuating earnings include the arts and entertainment, farming, catering and hospitality, construction and retail. These sectors are likely to have temporary workers, agency staff, workers with different types of contracts and zero hours workers among their workforce.
There is detailed information on The Pensions Regulator’s website http://www.thepensionsregulator.gov.uk/employers/know-your-workforce.aspx and the regulator encourages all employers to automate their processes to help meet their duties. This can include using payroll software to assess workers' eligibility. It is still important however that employers spend time ensuring all their information is up to date.
The Pensions Regulator also urges employers to ensure they leave plenty of time to check if their existing systems can be used for automatic enrolment and to source an alternative payroll software provider if required. Systems should also be checked prior to the staging date – the date when an employer’s automatic enrolment duties are switched on.
Company secretary Lisa Dunne, who was responsible for automatically enrolling staff at Sussex based home building company JW Stratton, stressed the importance of accurate information. She said: ‘What I did have to do was make sure all the relevant data on our small workforce was up to date so they could be assessed. This was not onerous, but every detail about an employee: their name, date of birth, National Insurance number, salary and employee/employer contributions must be totally accurate and up-to-date.’
Catering company Elior UK Plc’s head of HR Justin Johnson also highlighted the importance of starting preparations in good time. He said: ‘I’m sure that thousands of employers of all shapes and sizes will be able to relate to having a complex workforce of shift workers.
If I’m honest, when I first sat here two years ago reviewing the legislation and the information from The Pensions Regulator, I thought how on earth do you work your way through this? But it seems much more achievable if, like us, you break it up into a bite-sized plan. At the end of the day, I think the pre-staging period should be a time for calm, not panic.’
If an employer has not already found out their staging date, they must visit The Pensions Regulator website at http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx
The handy timeline planner http://www.thepensionsregulator.gov.uk/employers/planning-for-automatic-enrolment.aspx will also show what they need to do and when in order to comply with their automatic enrolment duties.
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