UK regulations make it mandatory to set up work place pension for your workforce and all employers regardless of your size need to have a pension scheme for its staff which can be done by following the below mentioned steps -
Confirm who needs to be contacted
As per the Pensions Act 2008, it us mandatory for every employer to set up or out certain staff into the scheme and make the contribution towards it that is also called as auto enrolment. Pension regulator, also called and known as employer contact is responsible to ensure that the legal requirements are taken care of and also to see who they should be sending all the information to. Setting up work place pension can take up to 6 months of time so it is better to be prepared well in advance with all the requirements.
Choose the right pension provider
Once you have reached the staging state, your next step is to see and choose the right pension provider for your employees. You can do this very step in two ways; i.e. either you choose the service or pension provider by yourself or you take the help of a financial adviser who can guide you in selecting the right one based on your business and its requirements. While there is no harm in choosing the pension provider yourself, going through a financial adviser is a hassle free approach.
Assess your workforce
Once you reach staging force, you need to assess your workforce and do the following:
- Automatically enroll eligible jobholders onto a workplace pension.
- Provide the option of joining the workplace pension to the non-eligible job holders.
- Educate your entitled workers on benefits of joining the workplace scheme.
Submit your employee’s details
This is the step which you have to do after you have selected your pension provider. Once you have finalized the pension provider, you have to contact them and submit all necessary and required information of the eligible jobholders in your workforce. Along with the details of the eligible jobholders, you have to submit the details of the non-eligible jobholders, if any, who have opted for the workplace pension scheme. Also if there are any eligible jobholders who are not fitting in the selected pension provider or scheme, you have to provide them an alternative and with a different pension scheme that accepts their contributions.
What records you must keep
It is important for you to have all the information in the right format and irrespective of the pension provider you have selected for setting up your workplace pension, you must have following information:
- Name of the employee
- National Insurance Number
- Joining Notice
- Pension scheme reference – optional
- Scheme address – optional
- Scheme name – optional
The above information should be kept for a period of at least 6 years.
Setting up your payroll
This is quite an important step where you should not do any mistake. While you are setting up your payroll, it is important for you to get the following employee information from your payroll department:
- Name of the employee
- Date of birth
- Earnings e.g. salary or wages
Once you reach this stage, you will get to know if you need to upgrade your payroll software
or not. However before you reach this stage, you must know the following:
- Your staging date
- Whom you need to enroll
- Who is your pension provider
Do you need to upgrade your payroll software?
In order to have all the information right it is advisable to start checking the accuracy of the employees at least 6 months in advance of your staging date. Doing so will also give you enough time and space to update your system in case of any wrong entry. Also, it is important to ensure that your existing payroll software is compatible with that of your pension provider and in case it is not, it is advisable to upgrade your payroll software as per your pension provider because it will help you to save lot of time and effort in sending the employee information on a regular basis. Apart from checking the compatibility of your payroll software with your pension provider, you must also check if your existing payroll software allows you to manage employees opting in or joining your workplace pension.
How to comply with new regulations?
Although this is the second part of setting up workplace pension, it is as important as that of the first part. At this step you have to provide the required evidence to the Pensions Regulator to prove that you have done everything as per the law. Before you reach your staging state, you will receive a letter from the Pension Regulator asking the following information:
- Deadline date for auto enrolment
- Letter code
- Link to the registration process online
What is postponement?
Postponement is nothing but a timeline when you can defer the start of your employee duties for up to 3 months. However, postponement is only possible from the date a new employee joins your business and your staging date.
What information do you need to register for Pension Scheme?
In order to do the registration, you need to follow three steps:
- Get your government gateway ID.
- Register for enrolment well before staging date.
- Complete your registration after staging date.
The information you will need to include on The Pension Regulators website can be broken down into 5 categories:
Read More: Self Employed Pensions
- Information on the person completing the registration - e.g. you, an accountant etc
- Information about your business
- PAYE Scheme details
- Pension scheme details
- Workforce details - including eligible and non-eligible workers for auto-enrolment