October 9, 2017
The Pensions Regulator is warning that since 1 October 2017, anyone who becomes an employer for the first time is instantly caught by the pensions auto-enrolment regime. What’s the full story?
Having been rolled out slowly since 2012, auto-enrolment (AE) for workplace pensions now applies to nearly every employer who had workers on their payroll before 1 October 2017. The table below shows when AE applies for the remainder.
|DATE WORKER(S) FIRST EMPLOYED||DATE|
|1 April 2015 to 31 December 2015||01/10/2017|
|1 January 2016 to 30 September 2016||01/11/2017|
|1 October 2016 to 30 June 2017||01/01/2018|
|1 July 2017 to 30 September 2017||01/02/2018|
However, if since 1 October 2017 you’ve taken on a worker for the first time, or will be in the next few months, there’s an earlier deadline.
New Employer Trap
Since 1 October 2017 you have AE duties from the date you first start to employ a worker. If one or more of them are aged between 22 and state pension age, and they earn more than £10,000 per year, £833 per monthly; or £192 per week, they’re usually “eligible” employees who you must auto-enrol in a workplace pension unless they notify you that they wish to opt out.
Even if none of your workers meet the criteria to be eligible, you may have AE duties. For example, they may have the right to join or opt in to a workplace pension scheme, which means you’ll be required to set one up.
As a new employer one of your first jobs is to review your workers to see if they are eligible or have a right to join / opt in to a scheme. You must then send each of them a letter setting out their AE rights. Standard letters and detailed guidance on when and how to use them are provided by The Pensions Regulator (TPR).
If you are the only director of your company and it has no other workers, you don’t need to consider AE. The same goes if you company has more than one director, but none or just one of them has a contract of employment. If you receive a letter from TPR stating that your company has AE duties, notify it online that you don’t have any qualifying workers.
If your company has been outside AE because of the director-only exception, but takes on a worker on or after 1 October 2017, it will be treated as a new employer and so will have immediate AE responsibilities.
Setting up deadline
From the date that your AE responsibilities start (the staging date) you have five months in which to issue the appropriate letters to your workers and, if required, have a workplace pension available to them.
TPR can fine you for being late, and while it allows leeway, it’s now taking a tougher line. If in doubt we think the best way to comply with AE is to hand the set up to a pension company or financial advisor on day one.
If you have any queries about auto-enrolment or have already been exempted but are thinking of taking on employees contact us on 01530 416555 or firstname.lastname@example.org