I have recently been on a seminar for auto enrolment the new pension scheme which is affecting large companies now, but is being rolled out to all employers and employees over the next couple of years.
The timeline which keeps changing is
Small companies particularly
30-49 employees August 2015 to October 2015
Less than 30 employees January 2016 to April 2017
For your own specific deadline dates, go into the following link And put in your PAYE reference number.
I know these dates look so far away but they will be here before you know it, a letter will arrive on your doorstep one year before your staging date. You have a year to act, but as you can imagine just like Real Time Information if everybody applies for a pension scheme at the same time, which you and many thousands of companies will be doing. You could find yourself in the middle of a queuing system that could take you past the deadline date.
The financial advisors we use have told us that a pension scheme of this nature can take up to six months to be set up, so you really do have to be reactive and deal with it straight away.
This is not going to be like the stakeholder schemes there was no real policing of it and no real fine system. The government are very serious about this and will be issuing fines, one off fines of £400 and daily fines depending on your size of business of more than £50 per day rising to £10,000 per day for the larger companies.
We have a pension black hole which has been put off for many years, now is the time to fill the gap, this system is compulsory and to opt out is going to be very difficult. There some very serious rules that go with it. One of which is to not discourage members of staff to stay opted in. Heavy fines and prison sentences have been communicated more than £1,000 fixed penalty up to £5,000 for the larger companies not complying.
Each and every employer be it large or small, unlimited or limited companies will have to set up their own pension scheme that is compliant with the governments rulings. You can set it up yourself but it is advisable to use a financial advisor. Costs of which do vary.
You are able to set up these schemes ready for the deadline date now, and not have it go live until the deadline timings, worth knowing if you want to plan ahead.
There are some people who are exempt which are self employed with no staff, directors and some low paid earners, but you need to check the criteria nearer the time as this could change by the time 2017 comes along.
There are currently staged percentages for schemes already in place, rising to 5% for employees and 3% for employers by October 2018.
There will need to be changes to contracts of employment for every employee to take into account these new changes too.
I am sure it is not the best news to be hearing when times are still tough for a lot of people, but forewarned is better than not knowing at all.
Be prepared and plan for it in your budgets, you need to be thinking about how you will pay for it, be it pay freeze, increasing prices, or absorbing it into your normal overheads.
The full details are on page
This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.