All employers have automatic enrolment duties and you should make sure you’re ready for your staging date, which is when you’ll need to put any staff you have that qualify into a pension scheme. This applies to all employers – even if you have just one member of staff. If you need some more guidance about what to pay your staff, you can find it here.
The duties checker
Use The Pensions Regulator’s duties checker to find out exactly what your duties are, what you’ll need to do, and by when.
Your staging date
Your staging date is the time that you need to have complied with the new laws by. You can find out when your staging date is by imputing your PAYE reference number.
Your declaration of compliance
Whether or not you have workers who must be put into a pension, you need to complete a Declaration of Compliance and submit it to The Pensions Regulator to let them know you have met your duties.
The Declaration of Compliance shows TPR what you have done to meet your duties and must be completed within five months of your staging date – if you don’t do this on time, you may incur a fine.
Which staff qualify?
Not every member of staff needs to be automatically enrolled. It depends on their age and earnings – those who earn above £192 of qualifying earnings in a week (or £833 in a month) and who are 22 or over (but under state pension age) must be put into a pension scheme.
If you employ staff whose hours vary (e.g. zero hours contract), pay fluctuates, are seasonal or are on short-term/temporary contracts the legal duties will still apply to you.
Qualifying earnings include wages, salary, fluctuating elements of pay, bonuses, and some statutory payments such as maternity and sick pay. Not all pay elements fit neatly inside these headings, and a good rule of thumb is that if earnings are subject to National Insurance contributions, then they are likely to also qualify as earnings for automatic enrolment. Payroll software should help with this, and also where earnings fluctuate on a week-by-week or month-on-month basis.
Nobody to put into a pension scheme?
If you have no one to put into a pension scheme, you can bring your staging date forward to any date and declare your compliance at the same time.
Completing your declaration early means you can get this task out of the way and don’t need to think about it anymore.
Complete TPR’s online duties checker to find out more about bringing your staging date forward.
Missed your staging date?
The Pensions Regulator know that most employers will want to do the right thing for their staff and will work with you to enable you to comply with the legislation if you haven’t understood your duties or have been unable to comply. However, those who do not comply by their deadline risk a fine – the regulator will use their powers where necessary to ensure compliance.
If you are late complying or think you might be, you should tell The Pensions Regulator about it straight away.
To find out more, visit The Pensions Regulator’s web page: What happens if I don’t comply?
Re-enrolment: Declare your compliance at the same time that you re-enrol your staff.
Every three years you must put certain members of staff back into an automatic enrolment pension scheme. This is called re-enrolment.
If you’ve chosen your re-enrolment date, then put a note in your diary to complete your re-declaration of compliance at the same time and tick both off your list in one fell swoop. Find out more information here.
If you are late complying with your duties
TPR’s approach is to educate and enable and enforce where necessary. They get in touch with you to make you aware of your duties and to help you understand what you need to do to comply with the law. As the employer, it is your responsibility to meet the new employment laws.
If you haven’t understood your duties or have been unable to meet them, the regulator will provide support to enable you to comply. However, if you have chosen to ignore your duties, they may use their enforcement powers.
If you are late complying or think you might be, you should tell TPR about it straight away.
You should aim to put all staff back in the position they would have been in if you had complied on time.
For example, if you didn’t put a member of staff into a pension scheme on your staging date when you should’ve done, you will need to:
- Put them into a pension scheme and treat your staging date as their automatic enrolment date.
- Backdate contributions so that your member of staff does not lose out.
- Give your staff member the option to pay their own backdated contributions - they can choose whether or not they want to do this.
What are The Pensions Regulator’s enforcement options?
Informal action: Guidance and instruction can be issued by telephone, email, letter and in person. Warning letters may also be sent confirming a set time frame for compliance with the duties.
Statutory notice: A statutory notice will tell you to comply with your duties and/or pay any contributions you have missed or are late in paying.
Penalty notice: A fixed penalty notice may be issued if you don’t comply with statutory notices. This is fixed at £400 and payable within a specific period.
An escalating penalty notice can be issued for failure to comply with a statutory notice. This penalty has a prescribed rate of £50 to £10,000 per day depending on the number of staff you have.
A civil penalty can be issued for cases where you fail to pay contributions that are due. This is a financial penalty of up to £5,000 for individuals and up to £50,000 for organisations.
TPR will recover all penalty fines issued, and will take the case to the courts if the problem escalates.
What to do if you have received a penalty notice
If you have received a penalty notice, you can pay it using TPR’s secure online payment service. You should have your penalty notice reference handy (shown on the front of the notice). Failure to pay the penalty can result in The Pensions Regulator bringing formal legal proceedings to recover the penalty.
You can pay your fine using the online payment service here.