The Pensions Regulator
This month, we’re writing to over 95,000 small and micro employers with less than six months to go until their staging date
to tell them it’s time to choose a pension scheme. Lower paid staff only get tax relief from the government in certain types of pension scheme, so this is one of things you’ll need to consider if you’re helping your clients choose a scheme. Find out more.
6. Choosing a pension scheme
This task should be completed 6 months before your client's staging date
On this page
·
Overview
·
Finding a new scheme
·
Checking an existing scheme
·
Advanced guidance
Overview
If your client has staff to automatically enrol they will need a pension scheme. They will need to either set up a new scheme or check their
existing scheme meets certain criteria.
Finding a new scheme
Your client will need to find a scheme for them and their staff that will work with their payroll process or software they’re using. It’s
advisable that your client allows plenty of time to make the right choice. They may ask you to help them. Find more information onwhat
to consider when choosing a scheme.
There are a number of different types of pension schemes available and different types of providers offering these schemes. The type of
scheme most likely to be available to your client is a scheme run by a large, specialist provider that is designed to be used by many different employers. For information on ways to find a pension scheme read find
a new scheme for your client.
You (eg accountants, book keepers, etc) can provide investment advice to employers choosing a pension scheme, but you need to be authorised
to provide advice to individuals. If you are concerned about what level of support and guidance you are able to give, read our page about your
role in helping a client to choose a scheme or watch the short
animation.
Checking an existing scheme
A client with an existing pension scheme may want to use it for automatic enrolment. This scheme will need to meet certain criteria, which
could involve changing the scheme rules or terms and conditions.
Check with your client’s pension scheme to see whether they can use it for automatic enrolment. Alternatively, for more information about
the criteria that schemes need to meet read what
to consider when choosing a scheme. If your client can't use their scheme, they'll need to choose a new one that meets the requirements for automatic enrolment.
Advanced guidance
This resource may help if you have more detailed questions on the above:
·
Detailed
guidance 4: Pension schemes (PDF, 341kb, 38 pages)
There are minimum requirements for schemes to qualify and to be used for automatic enrolment, and details on certification and use of schemes based outside the UK.
One in five firms missing their auto enrolment staging date
July 18, 2016
Embargoed for release: 18 July 2016
“Smaller employers are either planners or procrastinators,” says NOW: Pensions
Of the companies that signed up with workplace pensions provider NOW: Pensions in the second quarter of 2016, 40% completed their application either
very close to their staging date or after their deadline had already passed.
Of these employers, 19% contacted NOW: Pensions within a month of their staging date whilst one in five (21%) left it until after their staging date
had passed – the highest percentage over the recorded quarters.
At the other end of the spectrum however, over a third (34%) of firms signed up six months or more ahead of their staging date whilst over one in ten
(11%) signed up three to six months in advance. Just 5% of employers took action between two and three months ahead of the deadline while 10% got their scheme in place between one and two months ahead of their staging date.
Months to staging date
|
Q2 2015
|
Q3 2015
|
Q4 2015
|
Q1 2016
|
Q2 2016
|
6 or more
|
30%
|
31%
|
31%
|
13%
|
34%
|
3 – 6
|
16%
|
12%
|
19%
|
36%
|
11%
|
2 – 3
|
6%
|
9%
|
10%
|
6%
|
5%
|
1 – 2
|
16%
|
11%
|
12%
|
9%
|
10%
|
Within a month before staging
|
19%
|
27%
|
15%
|
21%
|
19%
|
After staging date
|
13%
|
10%
|
12%
|
16%
|
21%
|
*Percentages subject to rounding
Morten Nilsson, CEO of NOW: Pensions said: “As
time goes by, it’s becoming increasingly clear that when it comes to auto enrolment, smaller employers are divided into planners or procrastinators.
While it’s worrying that one in five are missing their staging date, it’s also reassuring to see that a third are planning well in advance.
Small business owners have a lot to think about and it’s easy for auto enrolment to be put on the back burner but the fines for non-compliance are
steep missing the deadline can cause unnecessary sleepless nights.
Auto enrolment is complicated so the longer firms leave to tackle it, the more confident and comfortable they’ll be able to feel.
Firms that don’t comply with auto enrolment receive a 28 day warning notice. If the warning notice is ignored, a fixed penalty notice of £400 is issued.
On top of that, employers with between one and four employees, can be fined £50 a day. Those employing between 5 and 49 people can be fined £500 a day.
For more tips on what to do if you’ve missed your staging date click here.
-Ends-