Anne-Marie Winton comments in NatWest ContentLive on SMEs’ legal responsibilities in regards to the Pensions Act
Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it. This is called automatic or auto enrolment. If you employ at least one person you’re an employer and you have certain legal duties.
“The penalties for not acting are potentially severe,” says Partner Anne-Marie Winton. “TPR has the power to issue penalties for non-compliance with the automatic enrolment regime, and it’s not afraid of using this power. In 2016/17, the regulator issued over 12,000 fixed penalty notices of £400, and 2,500 escalating penalty notices, which can run into the tens of thousands of pounds. Employers can also receive a county court judgement for failure to pay these fines, which remains on their credit record for six years.”
Once you’ve auto-enrolled your workforce, you’ll need to keep track.
“Implement a system for identifying whether and when new staff will need to be automatically enrolled,” says Anne-Marie. “This involves both tracking when they reach the age of 22, and when they hit particular earnings triggers in any pay period, such as £10,000 a year, £833 a month or £192 weekly for the 2017/18 tax year.
“Employers also need to maintain records for six years, documenting how they have met their legal duties. This includes keeping records of requests to opt out of scheme membership for four years, and diarising the need to re-enrol those who have opted out, if still eligible, every three years.”
Read the full article in NatWest ContentLive here
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