Workplace Pensions – Pension reform that affects all small businesses now.
New legislation has been introduced making it mandatory to offer a pension scheme to your employees.
Each employer is allocated a date (referred to as the “staging date”) by which this mandatory pension scheme must be in place and those small businesses who have not yet reached their staging date will be due to stage in 2016 and 2017. Hundreds of thousands of businesses across the UK are in this position.
The Pensions Regulator (TPR) is recommending that employers take action at least 12 months prior to their staging date and that schemes be set up well in advance, to avoid last-minute problems. Employers who fail to meet their obligations under the regulations will face censure and penalties from TPR.
Your obligations as an employer will be to:
- Set up a qualifying pension scheme and communicate with your employees, as necessary.
- Assess your workers each pay period and communicate the outcomes of the assessment.
- Calculate and process the pension deductions and contributions through the payroll.
- Administer the necessary reports to the pension scheme provider, the tax office and the workers.
- Communicate to your workers their options either to opt out of or back in to the pension scheme.
- Handle any queries the workers may have.
The burden of compliance will fall on your payroll administrator. They should be aware of the obligations for your organisation and should now have a plan in place. For more information on the legislation and your responsibilities, refer to The Pensions Regulator (TPR) website www.thepensionsregulator.gov. uk.