Does it affect my SME?
All UK companies, except sole traders or Ltd companies with only one director (and no other employees), must set up Auto-Enrolment (AE). AE must be implemented by a company specific Staging Date (SD) which for most SMEs will be late 2016 to early 2017.
Broadly, such companies have to make a minimum 1% contribution of salary costs from the SD, then 2% from October 2017 and 3% from October 2018. Employees must make similar contributions rising from 1% to 5% over the same period. Penalties are high for non-compliance.
Although any employee may join, those aged between 22 and the state pension age plus earning >£10,000pa must be enrolled.
What do you need to do?
The government website (http://www.thepensionsregulator.gov.uk/) helps take you through the necessary steps which are:
- Give the regulator a contact name within your company for correspondence (you’ll need your PAYE Reference number as stated on any correspondence with HMRC).
- Find out your SD (http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx).
- Find a suitable pension scheme 3-6 months before the SD and ensure that it interfaces with your payroll.
- Just before SD, identify the employees to be included (based on their salaries and ages).
- Write to all staff, individually, within 6 weeks of SD.
- Confirm compliance with the regulator within 5 months of SD.
It’s not yet too late, but invest a little time and start today.