Providing a workplace pension is a continuing process for employers, and there are on-going responsibilities to carry out after you’ve initially declared your compliance to The Pensions Regulator.
First, it is important that you provide The Pensions Regulator with the contact details of the most senior person within the organisation. For example, this could be the CEO or managing director.
You can also nominate a secondary contact. This should be someone who will be assisting in the implementation of the workplace pension in your business.
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A Staging Date relates to employers who existed prior to October 2017. Employers that employ someone for the first time from 1st October 2017 will have a duties start date. TPR (The Pensions Regulator) will send all employers a letter confirming when their automatic enrolment duties commenced. For employers with a duties start date this is likely to be in the past and TPR needs to know that you have commenced paying your employees. The letter will include a unique code that will allow you to interact with TPR.
It is important that you auto enrol your employees on time and then submit a declaration of compliance. Employers must not take action to try to stop employees from enrolling in the pension scheme.
This could be in the form of acting to discourage existing employees from auto enrolment or making it clear when hiring new employees that those who wish to be auto enrolled will be considered unfavourably.
If you fail to comply with statutory notices, you may be issued with a fixed penalty notice. These types of penalties are set at £400.
Another option for The Pensions Regulator is to issue an escalating penalty. These types of penalties will vary depending on the number of staff you employ i.e. if you employ a high number of staff then the penalty will be much higher. These penalties range from £50 to £10,000 per day.
An alternative penalty at the disposal of The Pensions Regulator is the civil penalty. This penalty may be utilised if you fail to pay the contributions that you owe your staff when they contribute to their pension scheme. This penalty can be up to £5,000 for individuals, i.e. business owners or managers. There can also be fines of up to £50,000 for the company itself.
The final option that The Pensions Regulator can call upon is the 'Prohibited Recruitment Conduct Penalty Notice'. The severity of this penalty varies depending on how many staff are employed in the company and can range from £1,000 to £5,000
You must enrol and make an employer’s contribution for all staff who:
You don’t have to enrol an employee if they give you proof of their lifetime allowance protection.
You must pay at least 2% of your employee’s ‘qualifying earnings’ into your workplace pension. This will rise to 3% in April 2019.
Check the pension scheme you’re using to find out what counts as ‘qualifying earnings’.
Under most schemes, it’s the employee’s total earnings between £6,032 and £46,350 a year before tax. Total earnings include:
As of 6 April 2018, the minimum contributions for the workplace pension increased.
| Date effective | Employer minimum contribution | Staff contribution | Total minimum contribution |
| Currently until 5 April 2019 | 2% | 3% | 5% |
| 6 April 2019 onwards | 3% | 5% | 8% |
Note: You and / or your employer may already have chosen to pay more than the minimum contributions. If your payments are greater than the increased minimum levels, you will not need to pay any more.
It is an employer's legal duty to write to their employees and inform them of how automatic enrolment will affect them. This must be done within six week of your staging date/ duties start date. You must write to those members of staff who are automatically enrolled as well as those who are not being enrolled.
By choosing a workplace pension provider like Smart Pension, the administrative task of composing and distributing communications to all staff is done automatically for you.
You must deduct contributions from your staff’s pay each month. You’ll need to pay these into your staff pension scheme by the 22nd day (19th if you pay by cheque) of the next month.
You must pay your contributions for each employee by the date you’ve agreed with your provider.