Sep 2021
13
A start-ups guide to auto enrolment
If you’ve just started a new business, firstly – congratulations! Secondly, are you planning on hiring employees? If so, under the Pensions Act 2008, every employer in the UK must enrol their eligible staff into a workplace pension and pay into it. If you are not a new business but are considering hiring your first employee, you will have automatic enrolment duties that you must comply with straight away. Your new auto enrolment responsibilities apply from the new employee’s first day of employment. This will be known as your duties start date.
Getting started
The Pensions Regulator (TPR) have an online tool that employers can use to find out what you’ll need to do for automatic enrolment. What you need to do will depend on whether your employees are being enrolled into a pension scheme or not. Either way, all employers have duties to carry out including an online declaration of compliance that needs to be submitted to The Pensions Regulator.
Ongoing duties
Each time you pay your staff (including new starters), you must monitor their age and earnings to see if they need to be enrolled into a pension scheme and how much you as the employer, need to pay in. BrightPay payroll software will automatically assess all employees once the duties start date is reached. It will continuously monitor any changes to an employee's work status each pay period and flag an employee if they become eligible to notify you that auto enrolment duties need to be performed.
BrightPay is compatible with 18 different workplace pension schemes and includes direct API integration with NEST, The People's Pension, Smart Pension, and Aviva. The API integration allows BrightPay users to send their pension data to the pension provider with one click.
Automatic re-enrolment
Every three years (from your duties start date) you must carry out re-enrolment to put back in any staff who have left your scheme. Re-enrolment is a legal duty whereby if you don’t act, you could be fined.
In BrightPay, if employees meet the criteria for re-enrolment, on-screen flags and alerts will appear to notify you that you now have re-enrolment duties to perform. This feature is included in BrightPay and will be activated by entering your chosen re-enrolment date into the software.
Costs involved
According to The Pensions Regulator, 61% of employers with 1 to 4 staff had no overall set up costs. All payroll software providers should be making it easy for employers to comply with their duties and not charge extra for the functionality. All BrightPay licences include full auto enrolment functionality at no extra cost, including personalised auto enrolment letters to employees.
Find out more about processing payroll and automatic enrolment by booking a free 15-minute online demo.
Related Articles:
- Auto enrolment delayed in Ireland until 2023
- How will auto enrolment work in Ireland?
- How do I choose a re-enrolment date?
