Auto Enrolment FAQ’s

1. Is there any way around the need to comply with all the employer duties?

As an employer, you must comply with all of your duties. The Pensions Regulator will be auditing all companies to make sure they are fulfilling their duties and there are substantial fines that may be levied against those that do not comply.

 

2. Do I still have to comply with the employer responsibilities if I have an existing pension plan?

Yes. You still have employer duties even if you have a pension scheme that meets the minimum requirements.

 

3. What penalties will I face if I don’t comply?

The Pensions Regulator will check employers are complying with the new rules. If you are found to be in breach of any of your responsibilities, you will be issued with a notice of enforcement. You will have the right to challenge that notice, but according to the outcome of the investigation, a penalty may apply.

Fines can be levied where companies have:

  • Failed to register with the Regulator.
  • Coerced their employees to opt out.
  • Failed to meet monthly contributions.

The values are shown in this table:

4. When would an employer use postponement?

As an employer, you have the right to postpone the enrolment of your employees for three months after the required commencement date of your scheme (also known as the ‘staging date’). This can reduce your costs significantly and there may be other benefits too. You may want to use the postponement facility for administrative reasons. For example, you may:

  • Need time to assess all of your employees.
  • Prefer to align the enrolment of employees with the payroll process, or avoid paying a part-month of contributions.
  • Want to avoid having to assess employees who are with you temporarily, or who have a one-off spike in earnings and would otherwise not qualify.

You are also able to postpone the enrolment of an employee for three months from the day they start with your company, or from the date an existing employee becomes eligible to join the scheme.

 

5. Is salary exchange permitted to meet the minimum contribution levels?

Yes. Salary exchange is where an employee can give up part of their salary or bonus to their pension fund, resulting in their gross salary being reduced and the employee paying less tax and National Insurance. As an employer, you will make savings on your National Insurance bill, which you can then use to reduce your costs.

6. What are the minimum contribution levels?

The minimum contributions that you must pay into your staff’s pension scheme are being introduced gradually over time:

 

7. Will NEST fulfil my employer duties?

No. NEST is a pension scheme into which pension contributions from auto-enrolment can be paid and invested. However, there are employer responsibilities that must be carried out that NEST will not undertake on your behalf.

What our clients say about us

“I have been very pleased with the level of knowledge and experience of Berry Wealth Management. They take the time to really get to know their clients, which gives me every confidence that my financial goals are understood. They regularly provide updates, and have always been available to answer any questions or to explain options within my portfolio. Transitioning into retirement has been much more comfortable thanks to their help and guidance.”

~ David Leaney

 

“We have been advised by Colin for the past nine years. During this time, we have been extremely pleased with the indepth advice. The frequent reviews have helped us make some excellent, well-informed financial decisions. Colin has always attached an excellent element of professional tax-efficient advice coupled with caution that has comforted us in many ways. We wish that we had met Colin earlier, as we would have enjoyed more longevity of first-class financial planning advice.”

~ Keith & Joanne Hobbs

 

“Colin has been our financial adviser for nearly two decades, he has always offered a consultative approach to financial advice, and this has most definitely enabled Elizabeth and I to retire earlier. Colin also has a good selection of contacts for other areas where advice might be required, and having a trusted source for such recommendations has been invaluable. I do not like the larger companies’ impersonal approach and feel we are valued customers of Berry Wealth Management.”

~ David & Elizabeth Donnelly