Feb 2015
4
Nannies will have to be Auto Enrolled in a Pension Scheme
Do all nannies need to be automatically enrolled?
Most do; nannies who are aged between 22 and the State Pension Age and earn above the Tax Free Allowance (currently £10,000) will need to be automatically enrolled..
A nanny who does not qualify to be automatically enrolled still has the right to ask to join a workplace pension.
My nanny is part time - will I have to set up a pension for her?
Yes – even though your nanny might not need to be enrolled she has the legal right to join a pension. That means that you need to have a pension in place for her to join.
What if my nanny doesn't want a pension? Do I still have to enrol her?
If your nanny qualifies for automatic enrolment, you are legally obliged to enrol her. However, your nanny can always opt out of the pension scheme once they’ve been enrolled if they don’t want to take part.
When will automatic enrolment affect nanny employers?
Automatic enrolment is being introduced gradually. The day the new legislation applies to you is called your Staging Date and will be between now and October 2017.
Feb 2015
2
Employers fined by The Pensions Regulator over auto-enrolment failures
More than 160 employers were issued with fixed penalties of £400 last year after The Pensions Regulator (TPR) ramped up the use of its powers for auto-enrolment failures.
166 businesses were issued with fines in the last quarter of last year, compared to only three firms receiving penalties in the previous nine months. This increase coincided with a bulge in the number of medium-sized firms obliged to complete auto-enrolment last year.
There was also a surge in the number of compliance notices issued in the final quarter at 1,139, compared to 163 between July and September 2014. Employers are obliged to a submit a formal document, known as a declaration of compliance, to the regulator within five months of the firm's start date for the auto enrolment process.
The Pensions Regulator spokesman, Charles Counsell, has made it clear that it expects more firms to be fined as the enrolment process gathers momentum. "The number of employers approaching the date when they must confirm that they have complied with new workplace pensions duties (known as a declaration of compliance) is now beginning to rise significantly," he said. "With the mass market roll out of automatic enrolment to large numbers of small businesses in the coming months, we expect to see an increase in how often we need to use our powers."
The main reason for not signing up employees to a pension scheme on time seems to be that some employers have just not given themselves enough time to prepare. The regulator recommends that firms start planning at least a year before their staging date for beginning their auto-enrolment process.
Jan 2015
23
Automatic enrolment - Look out for a letter from The Pensions Regulator!
The Pensions Regulator will be issuing a one-off letter to all small and micro employers between the end of January and May 2015 to ensure they know when their new workplace pension duties start.
The letter will provide key information such as their PAYE reference number, the date the law applies to them and the process through which they can provide a nominated contact to the regulator to receive regular, useful and relevant information in the run up to the date at which they need to comply with their duties.
Approximately five million workers have already been automatically enrolled by nearly 43,000 employers. In the coming months and years, another 4 million workers will be automatically enrolled by small employers across the country. Small employers are those with fewer than 50 workers.
You can find out your staging date at any time by simply entering your PAYE reference into the Pension Regulator’s staging date calculator.
Jan 2015
22
Auto enrolment - DWP research on opt ins and opt outs
DWP research* (January-July 2014 stagers)
•Opt-ins 1%
•Average opt-out rate of 12% in 1st month after staging (range 5 - 15%)
•Ceasing active membership months 2 and 3 - 2%
•Average scheme participation rose from 43% to 73%
•Most likely to opt-out +50 yrs and part-time workers - opt-out reasons:
–lack of affordability (typically £20-£30k earners)
–some other form of saving and/or pension in place (50% of these earned less £30k)
–insufficient time to save enough (typically over 50 yrs)
–not planning to stay with employer and didn’t want small pot
–a few wary of pensions as a savings vehicle.
* 50 employers and 100 workers who ‘opted-out’ were interviewed. PAYE size range 62-499.
(Information source - The Pensions Regulator)
Dec 2014
23
Auto enrolment with BrightPay: The Movie
Meet John, the small business owner who uses BrightPay payroll software to easily manage his automatic enrolment duties.
In this video, John uses a NEST pension scheme to enrol his employees. However BrightPay is also compatible with NOW: Pensions, The People's Pension, Scottish Widows, and many more.
BrightPay provides everything you need to prepare your clients for Auto Enrolment.
- Staging and employee assessment
- Postponement feature
- Handles employee communications
- Ongoing monitoring and reporting
- Opt - outs and refund options
- Free email and phone support
- Fully compatible with RTI submissions & HMRC payments
- Integration with many pension providers (including tailored CSV preparation)
BrightPay is HMRC approved, RTI compliant and ICB (Institute of Chartered Bookkeepers) accredited.
Dec 2014
16
BrightPay joins Accounting Webs Auto Enrolment Campaign
Since October 2012, employers in the UK are obligated by law to enrol their employees into a pension scheme who fall within a certain age and pay bracket. Employers must also contribute towards this pension. This is called Auto Enrolment which will continue to be rolled out over the next few years with the largest companies already enroled. Employers will need to review their pension provision and make sure they’re complying with these new Auto Enrolment duties correctly.
BrightPay & AccountingWeb
BrightPay and Accounting Web are concerned with the number of small businesses and accountants that do not understand the implications of auto enrolment for their business. To combat the lack of awareness Accounting web have launched their ‘No one gets left behind’ campaign to let payroll bureaus and individual employers know what steps they need to do to comply with their AE duties.
BrightPay is delighted to become an official supporter of this Auto Enrolment awareness campaign. The aim is to help business comply with these new duties so they do not face large fines or put added pressure on their business. Accounting web have produced eight easy to understand, simple steps that explain what you need to know.
As of the start of December over 8,000 accountants are aware of Auto Enrolment due to this campaign. Make sure to share this guide with friends, work colleagues and business associates. Auto Enrolment can be made easy if bureaus have the right payroll software in place to deal with Auto Enrolment.
Help BrightPay spread the word and get the message out there.
Accounting Web - Free Guide
Nov 2014
28
Exhibiting at Chartered Accountants Hall
BrightPay were in London today at the ICAEW Sole Practitioners Conference in Chartered Accountants Hall, Moorgate.
200 ICAEW members attended the event. The subject matter of the lectures included:
Automatic enrolment
Economy update
Tax update
Panel debate: Tomorrow's practice
And more ...
Nov 2014
3
Small Employers Calling for Auto Enrolment Delay
According to research by the ACA (Association of Consulting Actuaries), Nine out of ten employers who have not reached their pension auto-enrolment staging date yet would prefer that the process be delayed until the new raft of new pension reforms are complete.
Thanks to Employee Benefits for their report on the ACA survey:
The ACA 2014 Smaller firms pension survey, which surveyed 414 organisations with 249 or fewer employees, found that six out of ten of respondents are supportive of the new pension’s flexibility, while one in ten are opposed.
The research also found that 56% of respondents support further changes to pensions, whereby current levels of pension tax relief are more targeted to those with lower incomes. More than a third also said that tax relief should be further restricted for those on higher incomes.
Among the 57% of respondents that have yet to auto-enrol, awareness of staging dates and budgeting appears low with only 46% of respondents saying they are aware of these.
The research also found that:
- The Median opt-out of employees from the 43% of respondents that have auto-enrolled employees is between 11% and 15%.
- 57% of respondents with between 10 to 49 employees plan to use the NEST (National Employment Savings Trust) to auto-enrol employees
- 62% of respondents with 10 or more employees are clear about when they must auto-enrol eligible employees.
Oct 2014
24
Employees' Confusion over Auto Enrolment
As an employer, have you taken the necessary steps to ensure your workforce has an understanding of auto enrolment? A recent study showed that one in four workers had yet to receive any information from their employer concerning automatic enrolment.
The study showed that out of more than 1,000 full time employees there was a significant uncertainty surrounding the changes to pensions, and a startling 6.1m workers in the UK are ‘confused’ over the changes to workplace pensions arrangements. 56% of them find the term auto enrolment confusing and could not say what it relates to.
As the employer, you are an important and effective channel of communication for your staff throughout the automatic enrolment process. The information you present to them can have a real impact.
In your workplace you could:
• Leave messages around on why saving for retirement is important, this can help engage staff with the subject of workplace pensions.
• Staff appreciate an explanation of what automatic enrolment means for them. For example, information about how much they'll contribute and when.
• Details of where staff can find out more on the matter e.g. online articles, email, posters and blogs.
Aug 2014
29
How to simplify your communications duties in auto-enrolment
Many employers do not realise the amount of work involved in the communications aspect of auto-enrolment. In a recent study, it was revealed that communicating the changes proved to be the most challenging aspect post-staging date, with 19% of employers struggling with communicating changes to employees.
Many payroll software providers are updating their software to assist with auto-enrolment; however very few of them perform communication duties. When deciding on payroll software, employers sometimes forget to consider whether or not it caters for communications. By choosing payroll software that helps with communications, it can make the auto-enrolment process much easier for employers.
With auto-enrolment, you need to write to each member of staff individually depending on their employee category. Eligible jobholders, non-eligible jobholders and entitled workers all have different rights, and so each must receive different letters outlining their entitlements.
If postponement is used, you must also write to the postponed employees to notify them. Furthermore, if you already have a qualifying pension scheme in place you still need to write to staff members who are in the scheme to let them know that they are not affected. After staging, you must also monitor employees and communicate with any employee who becomes eligible for auto-enrolment for the first time or any new starters who are eligible.
It is your responsibility to make sure the right information gets to the right member of staff at the right time. There are time limits in place to ensure that employees have sufficient time to gather information on auto-enrolment so that they can make a well-informed decision.
The necessary communication required can be extremely time-consuming if left to do it on your own. However, by having payroll software that has the necessary letters ready to print for each individual it can make your job much easier.
