Auto Enrolment – its here
The law on workplace pensions has changed. Every employer with at least one member of staff now has new duties, including enrolling those who are eligible into a workplace pension scheme and contributing towards it. Even if you are a sole director operating a PAYE scheme you will have statutory obligations under AE.
This is called automatic enrolment because it is automatic for staff they don’t have to do anything to be enrolled into a pension scheme, but it is not automatic for employers.
From October 2017 Auto Enrolment will apply immediately to all new employers registering for a PAYE scheme. For existing employers, the final staging dates will be January 2018 depending on when they registered as an employer. After this date it will be business as usual for all employers.
598,000 employers have automatically enrolled their staff into a pension scheme thus far, 225,000 of these have been small and micro employers, however 675,000 still have duties to come.
overall over 8,000,000 people have been automatically enrolled into a pension scheme this this process began.
Fines & Penalties
Fines are harsh with regards to AE non compliance, there is a fixed penalty of £400 for late filing of a declaration of compliance, even if it later transpires that you are indeed compliant with your obligations. If you continue to be deliquent then fines will move to escalating penalty notices, moving to a maximum of £10,000 per day! Please do not assume this is scaremongering, the TPR have issued penalties at this level and seem mighty keen to continue doing so, see latest cases here.