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Introduction »
Employers - have you thought about pensions for employees?
New duties on employers have been introduced to help more people save for their retirement and these duties include:
- the automatic enrolment of employees (and perhaps some other people who do work for the employer) into a pension scheme and
- a requirement to make contributions for those people into a pension scheme.
Employees will also have to make contributions.
This is the effect of the new law known as 'automatic enrolment'. The law came into force for very large employers on 1 October 2012 but fortunately, the automatic enrolment rules have staggered implementation dates based on the number of employees.
An employer can work out precisely when the automatic enrolment rules apply as the implementation date (known as the 'staging date') is based on the number of persons in an employer's PAYE scheme on 1 April 2012. The higher the number of employees an employer has on that date, the earlier the staging date.
Examples of staging dates
| Number of employees |
Staging date |
| 250 |
1 February 2014 |
| 62 |
1 July 2014 |
| 50 |
1 April 2015 |
For those with less than 50 employees the earliest start date is 1 June 2015 but the precise date will depend not only on the actual number of employees on 1 April 2012 but also on the employer's PAYE reference number. The earliest staging date for an employer with up to 30 employees on 1 April 2012 is 1 June 2015 and the latest date is 1 April 2017.
Importantly, it does not matter how many employees an employer has on the staging date - there may be considerably more (or less) than on the 1 April 2012. If you are an employer, look at the number of employees you had on the 1 April 2012 to know where you stand.
Employers with less than 50 employees but are part of a larger PAYE scheme
You may be an employer of a company which has less than 50 employees but the company is part of a group of companies and therefore has a shared scheme with the other group employers.
There are special rules for such employers.
As the staging date is determined by the total number of persons in the group PAYE scheme on 1 April 2012, the date may be earlier than if based on the number of workers in the company alone.
This is demonstrated below. For this reason the company can, if it wishes, move the staging date to a later prescribed date.
Example
Company Z has 35 employees on 1 April 2012. The normal staging date if this was a separate PAYE scheme is 1 October 2015. If company Z was instead part of a group PAYE scheme with 240 members then the staging date would be 1 April 2014. If company Z wants to, it can defer it's own staging date to 1 July 2016.
An employer can find out the detailed staging date rules from 'thepensionsregulator.gov.uk'.
So I've checked my staging date and it's a long way off then?
Well it may appear that way but an employer needs to have everything in place by the staging date. We would suggest an employer needs to have an idea of what it means for them at least a year before the staging date and an outline table drawn up for the various matters that need to be arranged.
Please talk to us if you would like further information and how we can help you manage the implementation of automatic enrolment.
Introduction »
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