6. Monitor the age and earnings of all staff Employers will need to monitor any changes in age and earnings of their staff to identify if they become eligible for automatic enrolment. They’ll also need to check eligibility of any new members of staff on the day they start work. Should staff members become eligible (for example by turning 22, or by meeting the earnings thresholds), then they’ll need to be put into a pension scheme and contributions paid to it. Payroll software should be able to support clients with this. 7. Process requests to opt in, join or leave the scheme, and keep and maintain accurate records. Opt in/join: If any staff write to their employer asking to join their workplace pension scheme, they must be put into it within a month of the request being received. Employers will have to pay into the pension scheme unless they are aged 16-74 and earn less than £490 a month or £113 per week. Opt out: If any staff choose to leave the pension scheme within one month of being put into it, employers need to stop taking money out of their pay and arrange a full refund of what has been paid to date. This must happen within one month of their request. Keeping records: Staff records need to be kept up-to-date, including who’s been enrolled and when, information about the pension scheme, and the contributions being paid. These records must be kept for six years, except for requests to leave the pension scheme which must be kept for four years. 8. Re-enrolment Every three years, all staff who either opted out of their workplace pension scheme or have ceased to become members need to be re-assessed and re-enrolled if they meet certain criteria. Employers will need to write to them to tell them what they’ve done – and then they’ll need to re-declare their compliance to The Pensions Regulator.
Further information on ongoing duties can be found on The Pensions Regulator’s website.
Useful links: Business advisers: www.tpr.gov.uk/knowing-your-clients-ongoing-duties Employers: www.tpr.gov.uk/ongoing-duties
A printable PDF version of this TPR article is available here
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Automatic enrolment and the law 6 December 2017
A Joint Policy Paper from Eversheds Sutherland and Royal London explores the question, ‘How far do employers’ duties extend?
“There is a general assumption that once employers have met their initial duties by enrolling eligible jobholders into a compliant scheme, re-enrolling those who had opted out every three years, and enrolling new workers as and when they start work, this is largely ‘job done’.
But this paper asks the question as to whether employers can simply sit back at this point and congratulate themselves on a job well done, or whether there are ongoing issues of which employers should be aware?”
The policy paper concludes that employers in general, and larger employers in particular, should be wary of taking their eye off the ball when it comes to automatic enrolment. It notes that there are examples in other countries of employers facing legal action where they are deemed not to have done the right thing by their employees when it comes to pensions. Also noted is that it would not be unprecedented for UK regulators and politicians to decide in the future that the employers of today should have met higher standards than the legal minimum requirements.
Employers who wish to insulate themselves against these risks may wish to consider the following areas identified in the paper:
In choosing a plan in the first instance, to undertake due diligence beyond simply selecting any ‘compliant’ plan; To recognise that automatic enrolment relies heavily on ‘defaults’ and that employees may be very passive in the whole process; in choosing a scheme, employers may therefore want to look at service to members, suitability of the default fund and other investment options and comparative levels of costs and charges; employers may also wish to engage with their employees to ensure that they are aware that statutory minimum contribution rates may not be sufficient to enable workers to afford to retire at a time of their
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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