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

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.