Taking on your first employee can be an exciting time but there are some responsibilities you need to be aware of. One of them is compulsory pensions these are your auto-enrolment responsibilities. Find out what this means below.
If that’s the case, then you’ll need to consider the auto-enrolment implications on your business. We’ve talked a lot about auto-enrolment for small businesses, you can find our series of blogs on our free support pages . If you don’t know what auto-enrolment is, then check out our auto-enrolment fact sheet first.
From October 1st 2017 your auto enrolment duties start from your employees first day of work. So you need to be thinking about this long before taking on a new member of staff. Firstly, you need to consider if the employee would be eligible for an auto-enrolment pension scheme.
Will your new employee be…
If your employee fits these criteria then you’ll need to choose and setup an appropriate pension scheme, which you and your employee will contribute to each month. The percentage of contribution will go up each year, see our blog about compulsory pension contributions increasing .
If your employee won’t be eligible, then you’ll just need to write to the Pensions Regulator, and your employee, detailing how you’ve met your auto-enrolment duties. We would suggest having a plan in place for future, in case they become eligible, or you’re considering taking on more employees. See our blog on choosing a pension scheme for more advice.
The Pensions Regulator has a wealth of information on this subject, see their Automatic Enrolment for Employers page . This will give you a deeper understanding of what’s required and help you get things started.
Non-compliance comes at a heavy price and the first company has been prosecuted for non-compliance by not putting their staff into a scheme. You can read more about this here .
Compulsory pensions and auto-enrolment is not as complicated as it first looks so don’t be daunted by the task. As business advisors and consultants we’re able to advise on this topic, and help you understand the implications for your business. Give us a call on 01273 882200.
If you're looking for more auto-enrolment advice then head over to our auto-enrolment knowledgebase
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