Guest blog by Matthew Mitten, Director of Enrolsme
By 2018 every employee in the UK earning more than £10,000 per year, and over the age of 22 will have been given the option to be automatically enrolled into a workplace pension. This includes charities. Those staff which opt in will see at least eight per cent of their earnings going into a pension – at least three per cent of that coming from their employer.
Many people have welcomed the onset of the automatic enrolment legislation, but we are increasingly hearing of organisations failing to comply with their automatic enrolment duties, and consequently being fined by The Pensions Regulator (TPR) through its ‘Automatic enrolment compliance and enforcement policy’. On the 1st March 2016, TPR had issued 1,021 fixed penalty notices.
In the last few months TPR has written to 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. And with half a million employers expected to reach their staging date this year, I envisage that the number of enforcement notices and fines will increase massively.
Leaders of small charities have so many different things to manage on a daily basis; automatic enrolment is yet another burden to add to their already heavy workload. Equally, pensions are complex – there is a lot that needs to be understood and managed when embarking on the automatic enrolment journey, that I am not surprised by the relative inactivity demonstrated by many.
However, what needs to be noted is that whilst TPR’s fines seem low ticket initially, they soon escalate and grow much larger.
The number of organisations due to stage in 2016 alone is more than the number that have staged since the onset of automatic enrolment in 2008. Charities with a staging date of 2016 and beyond need to act now – to avoid being part of the headlines around compliance and fines.
The planning should start now, to include:
- Definition of earnings – the first thing an employer needs to understand is the definition of earnings; which earnings will be included in the pensionable salary and – more importantly – which are not.
- Choose the right pension provider – the sooner they can make this decision the more likely they will put the best scheme in place for their staff. Delaying could mean they have little or no choice when it comes to selecting the pension provider (particularly when the tidal wave arrives).
- Engage your staff – employers need to make a decision on how they will engage their staff. If they opt for a quality scheme this can then act as a catalyst for communicating this to their workforce?
- Select the right levels of support – it is important to seek the right levels of support for setting up the workplace pension scheme. It doesn’t have to be a time-consuming and laborious task.
- Be prepared to work with your chosen provider to make the process as straightforward and manageable as possible.
- Think about automatic enrolment NOW – don’t put it off and delay further
If you need to set up a workplace pension for your charity, then please contact Enrolsme on 020 7469 2865 or via email at email@example.com. You can also visit Enrolsme website for more information: www.enrolsme.com.
ACEVO members are entitled to £500 discount when setting up their workplace pension with Enrolsme.
Enrolsme is a complete online automatic enrolment solution. Through the system, charities and businesses can be set up with a qualifying and compliant scheme in a matter of hours.
Foster Denovo Enrolsme Ltd is an appointed representative of Foster Denovo Ltd.
Enrolsme is a non-advised process and other options are available which may be better suited to a small business. They may be more complex and they are not offered under this solution. Small businesses who want to explore these options may wish to contact a financial adviser.