Auto-enrolment staging dates

Autumn 2013Small and medium sized businesses will soon have to start enrolling their staff in a workplace pension.

If there were between 50 and 249 members in your PAYE scheme on 1 April 2012, your staging date for auto-enrolment will be between 1 April 2014 and 1 April 2015.

However, if you started trading after 1 April 2012 your staging date will not be until May 2017 at the earliest. Smaller employers are subject to later staging dates, which can be found at:
 http://www.thepensionsregulator.gov.uk-/employers/tools/staging-date.aspx

You can bring your staging date forward if you wish to and start the process earlier. You might choose to do this to align it with your accounting date. However, you are restricted to a limited number of new dates; for example, there are just eight possible dates for 2014. To change your staging date, you need to give the Pensions Regulator a calendar month’s notice.

You can choose to postpone the start of automatic enrolment for employees for up to three months from your staging date. You will also be able to postpone automatically enrolling a staff member for up to three months from the day they started work or became entitled to be automatically enrolled in the pension scheme.

So you need to be thinking about the workplace pension scheme for your organisation as a matter of urgency. This could be an occupational scheme or a personal pension scheme. A relatively low cost option is the National Employment Savings Trust (NEST). The government set up this scheme so that all employers would have access to a pension provider. NEST can be used as the sole scheme for all staff, but it is also flexible enough to be used alongside other schemes.

You could use NEST for a particular group of workers or as an entry-level scheme for new staff. You could even use NEST as a base scheme for all employees but use another scheme for top-up contributions. The current annual cap for contributions into NEST is £4,500, but this is due to be removed by 2017. NEST is completely free for employers, but there is a simple low cost charging structure for members.

You should be warned that a number of technical changes have recently been made to the auto-enrolment rules, and these are now reflected in the detailed guidance provided by the Pensions Regulator.