Auto-enrolment comes to small businesses

01 Jun 2015

Today, 1 June 2015, is the first in a series of staging dates for employers with fewer than 50 employees, the last being 1 April 2017.

Auto-enrolment involves providing a pension for “eligible jobholders”, a category which includes permanent, fixed-term and temporary workers. Employers may use a personal pension scheme or an occupational scheme for auto-enrolment, provided the scheme meet the legislative requirements. Alternatively, employers can enrol jobholders in NEST (the National Employment Savings Trust).

On a related note, figures published by the Pensions Regulator demonstrate that it is starting to take a more aggressive approach to companies that have not complied with their auto-enrolment duties: of the 367 fixed penalty notices it has issued since July 2012, 198 came in the first quarter of 2015. However, a fixed penalty notice is for the relatively small sum of only £400 and the Regulator’s preferred approach is to assist with compliance rather than to be punitive towards non-compliance. Only on four occasions has the Regulator used its power to issue an escalating penalty notice of up to £10,000 per day.

For advice on your auto-enrolment duties and related issues, please contact:

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