March

Taking it step by step - TPR's new guide to auto enrolment for small businesses

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auto enrolment guideThe Pensions Regulator (TPR) have released a step by step guide to auto enrolment for small businesses.

The law on workplace pensions changed back in 2012 which saw the requirement for every business in the UK to auto enrol their employees into a workplace pension (after meeting certain criteria).

As TPR state

"It is called automatic enrolment because it is automatic for your staff – they don't have to do anything to be enrolled into your pension scheme, but it is not automatic for you. You need to take steps to make sure your eligible staff are enrolled into a pension scheme. Even if you already pay contributions into a pension scheme for your staff, you still need to check if it is suitable for automatic enrolment."

The guide has been introduced presumably in anticipation for the vast numbers of small businesses that are set to stage over the next couple of years. With 46,300 businesses set to reach their staging date in 2015 alone, more education is needed for those that are unsure about how to act.

The guide walks you through what to do at each stage and how to complete each part correctly in order to stay compliant with the legislation. The guide provides links to help you find out your staging date, provide a point of contact and which criteria need to be met for auto enrolment.

So what steps does the guide help you through? Some of them include:

1) Create your action plan

The main thing that is emphasised by TPR and IRIS is that you prepare in plenty of time for auto enrolment. The recommendation is to start preparing for auto enrolment 12 months before your staging date. If you know your staging date, you can create a personalised guide on TPR's website that will help you stay on top of what to do at each part of the process.

Further steps include "Getting ready" which detail working out how much you will contribute to a pension scheme and there is also a guide to help you work out what your contributions are likely to be.

2) Check your payroll process

It is extremely important that you check that your payroll software can accommodate the auto enrolment assessment. TPR recommend that you update your payroll software to streamline your auto enrolment process and save yourself a vast amount of time and resources. The IRIS AE Suite™ assess employees automatically with each payroll run, publishes communications to employees and distributes payslips and P60s electronically.

3) Choose a pension scheme

Another aspect that you need to take into consideration is that you need to choose your pension provider. Not all pension schemes are eligible for auto enrolment so you need to check this with your pension provider beforehand.

The government pension scheme; National Employment Savings Trust (NEST) is a pension provider that all employers can use for auto enrolment. There is further help on TPR's website for finding a pension provider.

4) Beyond your staging date

The guide goes on to explain what needs to be done when you reach your staging date, who you need to tell and what your ongoing auto enrolment duties are. The guide includes templates that you can use to inform your staff of auto enrolment changes as well as further information on postponement.

In addition to this, auto enrolment is an ongoing responsibility and you must continually assess your employees each payroll run in order to determine their auto enrolment eligibility. For example, one month, a certain employee could do less hours or be paid less which could drop them below the auto enrolment earnings threshold. 

The guide also stresses the importance of maintaining records. You must keep a record of all activity for six years and should be produced on request following an audit from TPR.

5) Declaration of Compliance

TPR found that one of the main reasons for businesses being fined for not complying with auto enrolment was simply that they had not filled or submitted their Declaration of Compliance. TPR's guide explains what this is and how you can do this with a multitude of different resources that you can use to help you.

The guide has been created in an attempt to help businesses get through auto enrolment. The legislation was brought in to help people save for their retirements and it is your duty as an employer to help your employees through this.

View the full guide

How can IRIS help?

We have a variety of different training and information that can help you through auto enrolment. IRIS auto enrolment training is a great way to learn in depth about the responsibility and what you need to do to remain compliant with the workplace pension reforms.

View IRIS auto enrolment training

Posted by
Lee Noble
24 March 2015
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