Auto Enrolment pension
Auto Enrolment
The introduction of Auto Enrolment has made it compulsory for employers to enrol eligible workers into a pension scheme to which they must contribute. Firmvalue Payroll Services can assist you with the assessment of your workforce to establish who should be enrolled, as well as keeping your employees updated about the changes.
We will also process the monthly reporting and upload it to your pension scheme provider’s portal, to complete the Auto Enrolment pension service.
Re-enrolling employees
When businesses reach the third anniversary of their original staging dates, they may need to re-enrol some employees back into an automatic pension scheme even if they opted out the first time. To provide some background; the threshold for automatic enrolment for 2019/20 is £10,000. You must submit a declaration of compliance to the Pensions Regulator, even if you don’t have any staff to re-enrol. But, if Firmvalue Payroll Services manage the pension scheme for you, we can do this on your behalf.
If you are uncertain whether this affects you, we can advise or provide additional guidance.
Increase in Auto Enrolment contributions from April 2019
From 6 April 2019, the minimum contribution that you and your staff pay into a workplace pension scheme increased.
Our team is on hand to assist if you wish to discuss any aspect of this change, because under the Pensions Act 2008, ultimate responsibility to ensure that these increases are implemented correctly falls on you as the employer. Penalties may apply if you don’t get it right.
What are the key increases?
In summary the increases are as follows.
| Key dates | Employer minimum contribution | Staff contribution | Total minimum contribution | |
|---|---|---|---|---|
| Current | 6th April 2019 | 3% | 5% | 8% |
| Previous | 6 April 2018 – 5 April 2019 | 2% | 3% | 5% |
How does Auto Enrolment work?
The total minimum amount of contributions must be paid into the scheme by law. It’s the employer’s responsibility to ensure that this is paid and, if necessary, that any difference between the minimum employer amount and the overall total is made up by their staff. This may differ if you’ve decided to cover the total minimum amount as your staff won’t need to contribute.
The amount you and your staff have to pay may also vary as a result of the type of pension scheme you’ve selected and its particular rules. For example there may be differences due to the type of tax relief applied.
Over and above this, you need to consider the different elements of staff pay that your employees are entitled to and if your chosen pension scheme takes them into consideration when calculating the required minimum contributions.
It can be complicated, therefore Firmvalue Payroll Services’ team is on hand to assist you with Auto Enrolment, providing you with all guidance that you need.