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What are my employer responsibilities under Auto-enrolment?

Most of you as employers would have received a letter from the Pensions regulator informing you that you have responsibilities under Auto-enrolment. This letter provides you with an all-important start date known as your staging date.

But what exactly are your responsibilities? In this article we will explain everything you need to know and do as an employer.

This article will explain:

  1. What are your responsibilities and the actions required by you as an employer both to your employees and the Pensions Regulator?
  2. Minimum contribution rates
  3. Announced forecast contribution rates

As part of your employer responsibilities you will also need to:

  1. Assessment of your employees and their options available to them
  2. Post assessment who you should automatically enrol to your pension scheme

For details on how to assess your employees, who you should automatically enrol and general advice and services on the auto-enrolment process please Contact Us and we would be happy to discuss this with you.

First why has the government introduced AE?

Automatic enrolment is a Government initiative to encourage and help more people save for later life through a pension scheme at work. Under the initiative all employers will have to set up a company pension scheme if they have what is known as eligible jobholders or either non-eligible jobholders or entitled worker choose to opt in.

1) Your responsibilities to the Pensions Regulator and your employees

A) ‘Declaration of Compliance’ for firms with employees

You will need to prepare this form for submission to the Pensions Regulator. You will need your letter code and PAYE number provided in your letter to you from the Pensions Regulator.

The form contains questions on your business details, details of the number of total and eligible jobholders you have and any details on any existing pension scheme the Company has Note that you can prepare this form before your staging date (remember this is the date given by the Pensions Regulator as your start date of your pension scheme) and save it online but you will not be able to submit it until your staging date has passed

Link to Form: Click here

B) ‘No-staff Declaration’ for Director only firms

Director only businesses with no employees are under no legal requirement to set up an auto enrolment pension scheme if they do not wish to do so. Such businesses will need to tell the Pensions regulator that you are not an employer and individuals in the business are either the sole or all Directors.

Link to Form: Click here

C) Responsibilities and actions to employees

Employers should provide an initial letter to each employee setting out their options for joining the pension scheme. Their options will depend on their age and earnings (further details in Part 2). Your accountant will usually provide this letter for you to distribute to all your employees

2) Minimum Contribution Rates

DateEmployer Minimum ContributionEmployee Minimum ContributionTotal Minimum Contribution
Before 5th April 2018*1%1%**2%

*Proposed date is subject to Parliament approval
** 0.8%* is the minimum deducted from the employee with a further 0.2% added through tax relief

2) Announced forecast contribution rates

The Government has recently announced that they are seeking to change the contribution phasing dates for automatic-enrolment to be in line with the tax year rather than October each year. The contribution rates from 5th April 2018 will be as follows:

DateEmployer Minimum ContributionEmployee Minimum ContributionTotal Minimum Contribution
6th April 2018 – 5th April 20192%3%5%
From 6th April 20193%5%8%

*Proposed date is subject to Parliament approval

If you have any questions about your responsibilities on auto-enrolment, please Contact Us and we would be happy to discuss with you.