February 2018 sees the last group of employers reaching their Staging Date and auto enrolling eligible employees into a Pension Scheme. But what happens to those employers who haven't put a pension scheme in place by their Staging Date?
The Pension Regulator has a very good website which will help you to understand your legal responsibilities as an employer - visit The Pension Regulator.
If you have missed your Staging Date you must tell The Pension Regulator. They will tell you that you must put your employees back into a position they would have been in if you had enrolled them at the time they were eligible. You will have to make the contributions they should have had if they had gone into the scheme at the right time. You would have to make these contributions even if your employee has told you that they would be opting out and even for those employees who have left your employment. You must also offer the employees who should have been enrolled the option to pay their own backdated contributions.
Just setting up a scheme and enrolling eligible employees into it does not complete your duties. You must make deductions, where appropriate, from your employees' pay, report these to your pension scheme provider along with your own employer contributions and pay the contributions into the scheme. You must also provide your employees with suitable correspondence about your pension scheme, depending on their status, within a set period of time after they start work for you.
The Pension Regulator will investigate non-compliance but they will probably request information voluntarily before proceeding to issuing formal notices so you do have an opportunity to put things right before any penalties are issued. However if you then ignore this voluntary request The Pension Regulator will begin issuing formal notices and you may then be subject to interest on missed contributions and penalty charges as well as still having to pay the pension contributions for your employees.
So it is important to know what you need to do and when in order to avoid being contacted by The Pension Regulator and to avoid what could be quite hefty fines.
Karen Reynolds is our Auto Enrolment Administrator and she has ensured all our client employers have had a scheme in place by their Staging Date and that all their ongoing correspondence and administration is completed on time giving them peace of mind and time to concentrate on other aspects of their business. If you would like peace of mind too contact Karen who can help with your ongoing administration or set up of a new scheme.