UK - Northern Ireland | Workplace pensions and your business

Colin Foote, Director - Employment & Equality Law

Auto-enrolment for all pensionable employees was introduced back in 2012 and since its inception, it has been scheduled to be rolled out across big businesses first, with small businesses being given extra time to get their plans and systems in place.

Large businesses in the UK have been living with auto-enrolment since late 2012, but fast forward nearly three years and the deadline for small businesses to have auto-enrolment in place for their staff has arrived.

As of 1 June 2015, any business with less than 30 employees is being put into the auto-enrolment scheme, but following a recent survey of these businesses, only 25 per cent have started to consider the implementation of auto-enrolment.

So what does this mean if you are one of the 75 per cent of small businesses that have yet to consider auto-enrolment?

You should firstly check when the deadline for implementation for your business is as a starting point. This will give you a goal to aim for. The government suggests that you will need 12 months to set up auto-enrolment in your business, so if your deadline is sooner than 12 months, you need to act now.

You should also be aware that if you fail to comply, you could face fines of up to £500 per day, which should be motivation enough to get the process started.

You will need to find a provider to offer the pension and this process may be lengthy and complicated, with some insurers cherry picking businesses. This could make this part of auto-enrolment difficult and time consuming. Pension providers will review your employees and may not want to accept them all or if they do, do this on equal terms so you need to have these discussions with them as soon as possible.

The requirements of your staff for auto-enrolment are:

• That they do not have a current suitable workplace pension scheme
• That they are at least 22 years old, but under State pension age
• That they earn over £10,000 a year (tax year 2015-16)
• That they work in the UK

If you have employees you should give some of your time to auto-enrolment as soon as possible so you don’t get caught out.

For more information about this article or any aspect of our employee relations solutions, please give Colin Foote a call on +44 (0) 845 834 0840