For all employees in your business, it’s important that they are automatically enrolled into a pension scheme. Not only is it a legal requirement, but an automatic pension payment will allow your employees to save money for the future long term without having to do any of their own finances.
However, for those companies looking to set up a new pension auto enrolment staging system, there are often many questions regarding the pension staging date.
How can you find out the pension auto enrolment staging date and what does it mean?
If your business gets pension payment wrong, there’s a chance that you’ll be faced with some expensive penalties – so this is something you really need to make sure that you don’t get wrong.
Read through our guide below to find out exactly what a pension auto enrolment staging date is and which of the pension auto enrolment staging dates apply to you.
What does the pension auto enrolment date mean?
The pension auto enrolment date is the date by which businesses should have set up their auto enrolment pension schemes.
You might be forgiven in asking whether this is even necessary, since didn’t automatically enrolled pensions become a legal requirement a long time ago?
Yes – automatic enrolment for pensions has been a legal requirement for all UK businesses since 2017. However, this legislation was slowly rolled out, allowing the UK government to mitigate confusion and to assist businesses throughout the process.
Bigger companies had earlier staging dates than smaller businesses, and much of the government’s support included informing businesses on why auto enrolment for pensions was so important and how auto enrolment can be managed by payment teams.
If your employee earns more than £10,000 a year and is over the age of 22, legally you must start automatically enrolling their pension for them.
Registration must be completed by the staging date, but details such as the particular pension scheme and where the pension funds are invested are left up to the employer and the employee to decide.
Are there any exceptions to this rule?
There are a couple of exceptions to this rule. Some people are responsible for their own pensions and do not have the option of pension auto enrolment.
These include:
- Freelancers
- Self-employed individuals
- Businesses made up of directors who do not have employment contracts
How important is auto enrolment for pensions?
Auto enrolment for pensions is crucial. Thanks to auto enrolment, it’s thought that over 10 million workers have been added to the scheme, but the job’s not done yet.
With every new hire, it’s important that the company educates their new employee on pensions, their options and the impact that pensions can have on their future and their future savings. This is all important information that employees should have as well as ensuring that they are enrolled before the staging date.
Additionally, all employees should know that they can opt out of the pension scheme if they choose. Employers are required to re-enrol all eligible employees every 3 years, but if the employee has still decided that they want to continue opting out of the pension scheme, they can continue to do so.
What’s the aim with this scheme?
This scheme can help employees build a more financially secure future and it can also be attractive for businesses too.
Depending on the pension scheme you choose, a good pension scheme can be an easy way to attract and retain staff.
How can I find out my auto enrolment staging date?
Your business’ auto enrolment staging date depends on the size of your business. Companies with more than 120,000 payrolled employees have had their auto enrolment staging date on the 1st April since 2012.
In 2017, it became a legal requirement that all British companies automatically enrolled their employees into a pension auto enrolment scheme.
All established businesses should have already gone through this process, but there are still deadlines to be aware of for new businesses and for enrolling new members of staff.
When should new hires be enrolled into the pension scheme?
You should enrol new hires into your chosen pension scheme within the first three months of them joining your company.
This can either be after they have started their job or after they have completed their probationary period.
When does re-enrollment occur?
Legally, re-enrollment must occur every three years and within five months of the original staging date.
It’s incredibly important that someone keeps a record of the original staging date and that the teams who are internally responsible for pensions know the staging date as well.
Crucially, your employees can be offered the opportunity to opt out of the pension scheme at this point.
What are the next steps?
The responsibility of ensuring that your employees are automatically enrolled into the pension scheme is down to the businesses, not the employees. Therefore, it’s highly important that your company uses an auto enrolment pension scheme that makes the admin simple and easy.
Our pension auto enrolment software will help you easily run your company’s pension scheme, with no risk of missing the staging date.
Our software will reliably and accurately guide you through all the complexities and we’ll ensure that your company is fully compliant with its pension obligations and that your company meets all Pension Regulator requirements. Our pension auto enrolment software is designed for medium and large sized companies and corporations – from just 100 employees to 15,000 members of staff.