Auto Enrolment

Take away the headache of Auto Enrolment and let us help you make the most of this initiative. Our experience also means that you can relax in the knowledge that you are in expert and safe hands.

As an employer it is a legal requirement that you must set up a pension scheme for your team, as part of the Government’s workplace pension initiative.

Our 360-degree approach could be really helpful if you are worried about the extra workload for your already busy team. We pride ourselves on only ever offering the best advice, so we’ll be happy to find the best AE solution for you, your team, and your business.

We are uniquely positioned... to offer a complete ‘recruitment to retirement’ service. We can help with much more than Auto Enrolment. We can also help with your HR and Payroll as well as your Pension Scheme.

At Hallidays we have many years of experience of looking after Pensions, Payroll and HR issues. This means that we are perfectly placed to expertly guide you through every aspect of AE and the areas of your business that it will affect.

You can choose... any combination of our services to meet the needs of your business.

When you set up your AE pension you may also choose to add Payroll services, or HR services, or even both. Whichever you choose, you can be sure the experts are taking care of every aspect, leaving you free to focus on doing what you do best. Our experience also means that you can relax safe in the knowledge that you are in expert and safe hands.

All of these services can be further enhanced with our ongoing support packages. If you would like the security of our expertise on a day-to-day basis, we are happy to provide our service for a set monthly fee. This will enable you to really focus on your business while we supply continuous support for your team.

Frequently asked questions

What is Auto Enrolment? What does it actually mean?

Auto Enrolment is a system for pensions due to the Government running out of money, a rising state pension age, and very few people saving for retirement.

Can we choose to do Auto Enrolment?

No. It is absolutely compulsory for all employers to provide a pension for their employees.

What are my responsibilities as an employer?

All employers must provide an AE compliant pension scheme for their employees, communicate to employees, and automatically enrol certain workers.

What kind of pension do I have to provide?

A workplace pension can be a group pension, a group stakeholder scheme offered by insurance companies, or can be one of the basic government approved schemes. The type of pension you are able to access depends on the number of employees you have and the average initial contribution levels.

It’s worth highlighting that NOT all pensions are AE compliant. You’re always best to have an expert check for you.

So if I have a pension scheme – how can I tell if it’s AE compliant?

If you already have a company scheme set up your pension provider should be able to confirm if it is AE compliant.

All government schemes such as NEST/NOW Pensions/The People’s pension are all AE compliant.

My staff already have their own personal pensions, can they use these instead?

No. Your obligations as an employer are to provide a scheme for your company. If you were to use individual pension arrangements, each of these pensions would need to be certified and registered as compliant, meaning much more paperwork for yourself.

You are still responsible for their pension arrangements even if your employee has a personal pension scheme.

Can my employees opt out if they do not want to join the scheme?

An employee who has been automatically enrolled in to a qualifying scheme has the right to opt out within one month of their auto-enrolment date. If a worker chooses to opt out, they can do this online, over the phone or by contacting the pension scheme provider for an opt-out notice. This opt out notice can NEVER be issued by the employer.

The worker then completes the opt-out notice and returns it to the employer and the opt-out becomes effective. Opt outs must be re-enrolled every 3 years. You must make it clear to your employees that it is their own responsibility to contact the pension provider to opt-out of the pension scheme and that you can NEVER do it for them.

If an employee opts out can employers pay them more?

Generally speaking employers are free to set their own contractual terms and practices subject to them being lawful. Offering higher pay to staff who opt out (even if this is only the cost of pensions) – might be considered to be offering inducements,

and there are heavy fines if they are felt to be encouraged to opt out.

Who do I have to enrol?

All eligible workers have to be enrolled. An eligible worker is one who is over 22, under state pension age, earning £10k this tax year and usually working in the UK.

Non-eligible workers can ask to join the scheme and you will be obliged to pay in on their behalf.

Do I need to inform my employees that they will be enrolled into the pension scheme?

Yes, you will need to communicate to all your team members even if they are not eligible to join.  There are 2 main letters that need to be produced:

  • To all eligible team members which tells them the date they are due to be enrolled. This needs to be done 6 weeks from the staging date.
  • To all non-eligible team members and one for entitled workers advising they can join if they wish. This needs to be done 6 weeks from the staging date.

What extra work will this mean for employers who process their own payroll?

For any employers who process their own payroll, it is worth speaking to your payroll software company to see what AE products they are offering which may help make things easier. Some of these products may have a charge, but could mean less work for you in the long run and mitigate any penalties for non-compliance. Some payroll products will automatically generate the letters for issuing to your team members and also produce the pension feeds which can be uploaded to pension websites.

It is important you do a check on all of the employee details you hold to ensure you have correct details. These details can have an impact on whether or not a team member is eligible and addresses/names must be correct.

You will need to…

  • Assess your workforce on your staging date and again 3 months later if you postpone for 3 months.
  • Check each pay period going forward to check for anyone that may have become eligible due to increase in salary or age, which then puts them into the eligible jobholder category.
  • Ensure each pay period that the correct amount is being deducted from each eligible jobholder and produce the necessary information to upload to the pension’s website.
  • Be sure if any new team members have started in the pay period and produce the necessary communication for them.
  • Check each pay period if anyone has opted out or would like to opt in and process as necessary.
  • Upload the information to the pensions website and pay over the correct amount to the Pension company at the end of each month as if you do not pay enough there may be penalties.

What is the Declaration of Compliance?

The declaration of compliance is a legal requirement by which an employer must provide certain information to The Pension Regulator confirming how they have complied with their automatic enrolment duties. The declaration deadline is five calendar months after staging date.

If you are using postponement of 3 months, it is especially important to diarise to provide this information as soon as possible as this cannot be done until your postponed staging date and that means you do not have as much time. I would advise that you keep any correspondence from The Pensions Regulator safe so you have all the details required to complete the declaration.

What will happen if my company does not comply with the rules?

If you don’t comply, you will face enforcement action from the Pensions Regulator. If it is a case of misunderstanding they will work with you to ensure compliance, however if you have chosen to ignore your duties they can issue fines and can use civil and criminal enforcement measures.

Fines of between £50 and £10,000 per day can be issued depending on the size of your company. So it’s really not worth taking the chance.

What do I need to contribute?

The payments can be phased in, with employer contributions of 1% in the first year, 2% in the second year and 3% going forward after April 2019.

These are a minimum and you can pay in more if you want to. By using postponement or salary sacrifice, some of these costs can be mitigated.

Can I use a salary benefit scheme to reduce my costs as an employer?

Yes, you can use an existing salary benefit scheme when setting up the pension, or setup a new one, which will help to reduce your Tax and NI costs. If you are using this approach you may need to re-word the communication to your team members to ensure they are aware of this.

You will need to be careful about this if you have any team members that are on, or just above, the minimum wage because if the salary sacrifice brings them below the NMW then that particular team member cannot be processed in this way.

How can Hallidays help me?

We can review any existing pension arrangements you have to ensure the scheme is compliant.  We can arrange a new pension scheme for your company and take care of all the paperwork and administration for you.  We can offer your staff a one to one meeting and can keep you informed of any future changes in legislation, which may affect your company.

We can provide a full payroll solution for you (including a salary benefits scheme) which will not only ease the burden of running the payroll each week or month but will give you peace of mind that all your payroll and Auto-Enrolment duties are being met and will give you extra time to concentrate on your business.

What our clients say

At CDS our company pensions have been managed by Hallidays for over 12 years. Our team have benefited from the security of knowing the future of themselves and their families are being looked after.

Bill Lea Director – CDS