By Jennifer McCaughan
Over the last while you may have noticed Dragon’s Den star Theo Paphitis front the latest advertising campaign for Auto Enrolment aimed at making small businesses aware of their duties to automatically enrol their staff into a pension scheme. More than 47000 large and medium sized employers have already completed the process of automatically enrolling their workers and now it is the turn of the 1.3 million small and micro businesses in the UK.
So what exactly is auto enrolment? The Government decided to introduce auto enrolment in an effort to encourage more people to save towards their retirement and if your business employs even one member of staff you will now have new duties including putting staff that meet certain criteria into a work place pension and contributing towards it.
Every Employer in the UK will have been allocated what is known as a ‘Staging date’. This is the date that the employer will have to have complied with the new laws and automatically enrol their staff. If you have not received a letter by now from The Pensions Regulator you can check your staging date on their website: http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx
You may be asking what the criteria for being auto enrolled is – there are 3 different types of employee in terms of automatic enrolment eligibility: an Eligible Job Holder; a Non-Eligible Job Holder; and an Entitled Worker. For the tax year 2015/2016 if an employee between the ages of 22 and State Pension Age earns over £10,000 per year they are known as an ‘Eligible Job Holder’ and must be auto enrolled. Outside of this is the ‘Non-Eligible Job Holder’ and this is employees who either fall outside of the age range of Eligible Job Holder (21 years old or younger or State Pensionable age to 74 years old) and earn over £10,000 per year, or employees who earn between the Lower Earnings Limited and the amount required to trigger Auto Enrolment (for 2015/2016 this is a salary or between £5,824 and £10,000). Non-Eligible Job holders do not have to be automatically enrolled on the staging date but they can choose to ‘opt in’ if they wish. An ‘Entitled Job Holder’ is a person that earns less than the Lower Earnings Limited (for the tax year 2015/2016 that is less than £5824) of any age. Entitled Job Holders do not need to be automatically enrolled however Employers need to make sure that that these workers have access to a pension scheme if they request to be part of one, however employers are not required to make contributions.
If your business has heard from The Pensions Regulator, then action is required. Luckily the team at RBL are here to help and can cover all of your businesses Auto-Enrolment requirements. Do not hesitate to contact us at Ross Boyd Ltd on 028 9032 0155 to discuss how we can help.