Auto-enrolment Pension Rules Kick In for Small Businesses
Laws that oblige small companies across the UK to begin the process of automatically enrolling their employees on to workplace pension schemes have been introduced nationwide as of June 1st 2015.
In what marks a key change in the rules relating to workplace pensions in Britain, all employers, however small they may be, have reached the staging date that legally obliges them to enrol all members of their workforce on to designated retirement saving schemes of some sort.
Failure to comply with the relevant legislation, which has been phased in over recent years, could result in small-scale employers receiving fines of £400 as issued by the Pensions Regulator.
The rules that now require all employers to auto-enrol their staff onto workplace pensions are already in effect with regard to medium or larger organisations and employers throughout the UK.
Fines being issued by the Pensions Regulator for failure to comply with the relevant rules on workplace pensions will start out relatively small, particularly for companies with only a few employees. However, consistently failing to comply with the new laws will leave employers potentially liable for additional fines on a daily basis.
For operations with fewer than five employees, the daily fines will be worth £50, while for those with between five and 50 employees the fines will be ten times as hefty and worth £500 each day.
Meanwhile, for companies with a workforce numbering anywhere between 50 and 250 employees, a lack of compliance could lead to fines worth as much as £2,500 being issued every day.
The Pensions Regulator advises that preparations for auto-enrolling employees onto a workplace pension should be undertaken 12 months in advance of staging dates as appropriate to ensure complete compliance.
Awareness of the need for employees to be enrolled onto workplace pensions as of June 1st is generally widespread but the Pensions Regulator has expressed concerns that not all small businesses are as prepared as they ought to be.
“While it is encouraging to see that awareness of automatic enrolment is improving, there are still too many employers failing to identify their staging date,” said Charles Counsell, the regulator’s executive director for automatic enrolment, in a recent statement.
If your small business needs to act on auto-enrolment to ensure that your workplace pension scheme is up to speed and completely compliant with the latest legislation then you can contact us directly at Begbies Traynor to discuss your requirements in confidence. We offer a free initial consultation.
Frank is Begbies Traynor's workplace pensions expert with 30 years' experience in the financial services industry. Frank has an outstanding track record working with some of the UK’s leading financial services and plays a key advisory role on matters relating to automatic enrolment. Frank is well known in the financial services circuit and has developed countless working relationships with professional introducer firms including accountants, solicitors and financial advisory companies.