Avoid fines for Pension Auto Enrolment
Pension auto enrolment remains a hot topic with more than one million businesses still to reach their staging date by the end of March 2018. A large proportion of these businesses will reach their Staging Date in the first quarter of 2017 which could prove to be a bottleneck with the pension providers if you leave it until the last minute.
The Pension Regulator has recently released information which shows that more than 63% of non-compliance notices handed out since 2012 were issued in the quarter from 1st October to 31st December 2015. Many of the warning notices and fines relate to non completion of the Declaration of Compliance which is the final stage in the auto enrolment set up process and must have been completed by the fifth month after your Staging Date.
The Pension Regulator expects 90% of the 500,000 businesses staging in 2016 to comply with the regulations leaving potentially 50,000 businesses with warnings and fines for non-compliance. These fines range from £50 to £500 per day, depending on the size of the company, but all start with a penalty notice of £400.
Swindon Town Football Club was recently fined £22,900 after it failed to comply. The Executive Director of The Pension Regulator said "This case illustrates what can happen when an employer buries their head in the sand and disregards their duties." "Failing to comply on time will not save you money. Not only do you risk a fine, you will also have to make back dated contributions."
Smaller employers are more likely to bury their head in the sand, think it doesn't apply to them, or just don't get around to it as they are busy running their business. But if you have a PAYE scheme then you must comply.
Many employers choose to use a third party to set up their pension scheme but how many employers know exactly what needs to be done? Is the third party completing the whole process or will they leave you in the lurch? We have come across employers who have paid large fees to have their scheme set up but it has not been done properly leaving the employer open to hefty fines if it is not sorted out in time.
The Pension Regulator website has a tool which you can use to identify what needs to be done. This will show whether or not you need to set up a pension scheme and if so what the process is. Every employer should use this because even if you know you do not have to set up a scheme The Pension Regulator won't know you don't have to unless you tell them!
Once you know what needs to be done you can identify a third party who will guarantee to complete the whole process for you. The best person to do it is the person who runs your payroll as they will have the majority of the information needed and will be able to assess your employees. There will also be companies, such as ourselves, who are not Financial Advisers (and therefore will not charge a large fee) but have the experience and knowledge to manage the process for you. We also happen to provide payroll services so know exactly the information required to set up and manage the scheme. You do not need a Financial Adviser to set up a compliant pension scheme as several of the most cost effective schemes for business are non-regulated products.
Our auto enrolment service will give you a choice of pension schemes and will ensure the whole process is dealt with in a straightforward painless manner from start to finish. It will save you time, it will not be expensive and you definitely won't be one of those businesses receiving a penalty notice from The Pension Regulator for non compliance. And if you would like ongoing help we can manage your payroll and ongoing pension compliance too.
Contact Karen on 01722 341820 for help with the set up of your pension scheme but don't leave it too long. Get organised now and don't be stuck in the bottleneck!