The law on workplace pensions has changed. 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 enrolment’. The responsibility for complying will rest with you, the employer. Those who do not comply will face enforcement action and penalties.
If you are the sole director and you have no other staff working for you, the company does not have automatic enrolment duties. If you believe you don’t have any automatic enrolment duties you will need to tell the Pensions Regulator that you’re not an employer. Failure to notify the Pensions Regulator will result in penalties.
All employers should receive a letter from the Pensions Regulator 12 months ahead of their staging date. This letter will be addressed to the employer, owner or most senior person in the organisation.
Do I need to set up a pension scheme if none of my staff need to be put into one?
If any of your staff are not aged between 22 up to state pension age and earn less than £192 a week or £833 a month, then you only need to put them into a pension scheme if they ask to join. If this happens, you’ll need to set one up at this point. If your member of staff earns more than £112 a week (or £486 a month) you must pay money into the scheme as well. If they earn less than this, you can choose whether you wish to pay money in or not.
If you have staff aged between 22 and state pension age, you’ll need to check each time you pay them after your staging date whether their earnings are over £192 a week (£833 a month). If their earnings are over this amount, you’ll need to provide a pension scheme for them. This includes anyone who starts working for you after your staging date as well.
Every employer with at least one member of staff will need to complete a declaration of compliance. If you only have one member of staff who needs to be put into a scheme, they’ll still need to be put into the scheme before they can ask to leave it.
Even if you don’t have staff who must be put into a pension scheme you still have other duties which include writing to all staff individually and completing your declaration of compliance.
What is a declaration of compliance?
This is an online form for you to tell the Pension Regulator how you have met your legal duties. Even if someone else has helped you with your duties and may even be completing the declaration for you, it is your legal duty to make sure that the declaration is completed on time and the information entered is correct. If not you may be subject to fines.