Do’s and Don’ts of Auto Enrolment

The Employers Do’s and Don’ts of Auto Enrolment – put simply!

Let’s get straight to the point. Auto Enrolment is complex but the Pension Regulators do’s and don’ts for employer’s obligations are not.

The Do’s & Don’ts of Auto Enrolment

Do’s Don’t
Arrange a suitable Employee Pension Scheme for workers choosing to opt in or join. Influence employees to opt out
Categorise and continually monitor your employees’ enrolment status (age & earnings) Hand the opt-out form to employees
Auto enrol all employees that fit criteria and periodically re-enrol every 3 years. Encourage opt outs with incentives:

  • extend or renew a contract
  • one off extra payment
  • higher salary
  • offer a promotion
Process opt outs, opt ins and manage refunds Discriminate against employees seeking a pension
Provide written communications to eligible & non-eligible employees Give any pensions advice to employees
Provide information to scheme provider Offer incentives to employees during recruitment
Keep and store compliant records for pension scheme and each eligible employee Use recruitment process:

  • to screen employees
  • imply employment is guaranteed if they opt-out
Ongoing written communications with employees Dismiss an employee because they stay in their workplace pension
Deduct pension contributions and pay the chosen Pension Provider  

What happens if you ‘don’t’ follow the rules?

The Pensions Regulator is policing the opting in and opting out process closely to safeguard employees.

If any breaches in policy or unfair treatment (or bribery) of your employees are identified it will result in eye-watering fines and a gruelling employee tribunal.

What can you do to keep right?

Most of the Auto Enrolment do’s are process driven.  A successful outcome is dependent on you following the rules, implementing a robust Auto Enrolment process, installing a compatible payroll system and software.

Correct tools and processes ensure you’re safeguarding your business and avoiding eye watering penalties.

Find out more about Auto Enrolment and safeguarding your business by reading our earlier blog: How following 8 simple steps can make Auto Enrolment easier for businesses. 

Avoid making costly mistakes or the temptation to cut corners.

When time is ticking on, the burden of compliance is overwhelming and with costs spiralling out of control it’s tempting for employers to cut corners.

Remember. The Pensions Regulator views mistakes or incorrect implementation as serious breaches in policy.

The penalties associated with unfair treatment of employees are not only financially crippling but affect employee relationships and can be damaging to your business’s reputation.

The solution – seek help as soon as possible.

At least 12-18 months before your Staging Date, we strongly recommend you speak to a business and tax adviser, like ourselves, to manage planning and the impact of Auto Enrolment.

If you don’t want to deal with the administrative burden of auto-enrolment. We are more than happy to deal with the process on your behalf.

You must also talk to an IFA specialising in pensions to select a suitable Pension scheme for your company. We can point you in the right direction.

Free Auto Enrolment Consultation

If you’ve received your Staging Date don’t ignore it. Call us now on 0141 290 0262 or contact us at arrange our free Auto Enrolment consultation.

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Until our next blog