Auto-enrolment update: what you need to know

You may recall our explanation earlier in the year that if you employ anyone e.g. your spouse, a nanny, housekeeper or cleaner, they may be eligible for a workplace pension.  You can read the introduction again here.   The next stages of auto enrolment are now becoming effective so you may wish to re-evaluate your position.

Duties for new employers from 1 October 2017

Up until 30 September 2017, new employers were allocated a staging date from which time auto enrolment would be effective. 

If you become an employer for the first time on or after 1 October 2017, you will have legal duties with immediate effect. Your auto enrolment legal duties apply from the first day your first member of staff starts work.

It is imperative that you prepare for becoming an employer and are aware of the necessary steps you need to take.   

We suggest that you consider a payroll bureau to ensure that all of your payroll obligations are met (including workplace pensions) and we would be very happy to help with this.  The team within Cassons Payroll Bureau are very familiar with helping our barrister clients and work very closely with John Davenport, Director of Cassons Financial Planning Ltd who advises on the pensions element.

Contribution increases

If you are an employer with staff in an automatic enrolment pension scheme, the minimum amounts that both you (and your employees) need to pay into your automatic enrolment pension scheme will increase from April 2018.

You currently need to ensure that the minimum amount (2% in total until 5 April 2018) is paid into the scheme.

From 6 April 2018, you must increase your minimum contribution to 5% in total.  The minimum contribution changes again on 6 April 2019 – see the table below.

As an employer, it is your responsibility to take action and ensure that at least the minimum amounts are being paid.  You are responsible for ensuring that your employees are fully aware and prepared for the changes.   

Date effective

Employer minimum contribution

Staff minimum contribution (unless paid by employer)

Total minimum contribution

Currently until 5 April 2018

1%

1%

2%

6 April 2018 to 5 April 2019

2%

3%

5%

6 April 2019 onwards

3%

5%

8%

Re-enrolment

Some of your employees may have elected to opt out the auto enrolment scheme.

Every three years employers must put certain members of staff back into an automatic enrolment pension scheme. This is called “re-enrolment”.

This whole process can be managed by your payroll provider however we are giving you an overview of the requirements.

Re-Enrolment steps

1.     Choose a re-enrolment date.

You have a six month window from which to choose a re-enrolment date.

2.     Assess and re-enrol staff

You only need to assess certain staff for re-enrolment.

If you have staff to put back into the pension scheme, you must do so within 6 weeks of your chosen re-enrolment date.

3.     Write to staff that have been re-enrolled

You must do this within 6 weeks of your re-enrolment date. It is your legal duty to write to each member of staff that have been put back into the pension scheme.

4.     Complete your re-declaration of compliance

Completing and submitting the re-declaration of compliance is a legal duty to show that you have fulfilled all your duties.

If your Auto Enrolment  pension has been set up by Cassons and your payroll is run by Cassons Payroll Bureau, we will manage all of this for you.