Why should Employers Assess their Position now?

Employers have certain responsibilities to ensure they are compliant with the new Pension rules, these include:

Provide information to employees when they become eligible to join the pension scheme

• Statement including 'the objective of automatic enrolment is to encourage jobholders to make pension saving'
• Automatic enrolment date
• Scheme name and contact details
• Value of contributions (both monetary & percentage terms)
• Tax relief arrangements

   

• Opt-out rights and how to exercise them
• Right to opt-in once every 12 month period
• Details of automatic re-enrolment
• Normal disclosure rules apply
• Where to find out about pensions & saving for retirement

Existing scheme members

• No action needed to enrol.
• Need to see if current arrangements meet new requirements.

Collect employee contributions as soon as eligible

• • May be required to collect employee premiums before auto-enrolment happens
• • Can only pass premiums onto scheme once auto-enrolment taken place

What Regulatory requirements are there?

• • Employers must inform the Pensions Regulator about how they have met their obligations within 9 weeks of their staging date, and every 3 years after that.

   

• • Employers, pension schemes & pension providers will have to retain records for 6 years, including opt-outs.

If employers do not follow these regulatory requirements then there would be penalties as follows:

Stage 1	Warning	Unpaid Contribution Notice
Stage 2	'Wake up call'	Fixed penalty of around £400
Stage 3	Persistent offenders	Escalating penalty

Workers penalty PER DAY

Number of Employees	Penalty (PER DAY)
1-4	£50
5-49	£500
50-249	£2,500
250-499	£5,000
500+	£10,000

 

Prohibited recruitment conduct

Workers Fixed penalty

Number of Workers	Fixed Penalty
1-4	£1,000
5-49	£1,500
50-249	£2,500
250+	£5,000

Third Parties

£400 fixed

£200 per day escalating

The penalties for not offering an appropriate pension to employees are very high and could prove costly for firms if they leave their planning too late.

Company Pension Review offer an initial consultation phone call with an Independent Financial Adviser to discuss your potential needs.

Please contact us to book in an appropriate time.