Approximately 500,000 small to medium sized businesses will set up a workplace pension this year. Indeed, it’s the biggest ever year for workplace pension enrolment. If you’re a small to medium business that will be required under the regime to provide a workplace pension, there are certain key dates that you need to have in your pension diary for this year. These are as follows.
Payroll integration is something employers need to think about on an ongoing basis this year. You will have a payroll system in place of course, but it’s wise to link it to your workplace pension provider in order to reduce the amount of admin required each month.
If you outsource your payroll to an external company, contact them to make sure you will not be charged extra should they not have an integrated system in place.
October 2017 is when staging dates will no longer exist. The staging date is the date when a company has to have a workplace pension in place, but by October this becomes obsolete. Any companies formed after October 2017 will have to offer a workplace pension straight away.
End of 2017
Auto-enrolment into the workplace pension is an ongoing task. However, because the workplace pension has been rolled out across larger companies first, this year the majority of companies joining will be small to medium sized businesses.
This means it’s likely that if you haven’t already had a date to join, you’ll need to join by the end of this year.
At the end of this year, the Department for Work and Pensions (DWP) will start to review how successful auto-enrolment has been, and whether it can be improved.
This may lead to further changes in the year ahead, such as to the rules of the ‘earnings trigger’ (the minimum amount a person needs to earn before the automatic pension kicks in).
The aim of the DWP review is to look at ways in which certain workers could benefit more, such as those that work multiple jobs. It will also assess how much of a burden is being placed on the employer under the current auto-enrolment system. It’s important therefore that all small to medium sized businesses keep an eye on the review and any changes that may occur.
As things stand, under auto-enrolment, the minimum contribution to a workplace pension is currently set at two per cent of an employee’s qualifying earnings, with one per cent being contributed by the employer.
In April 2018, this is set to rise to five per cent, with employers contributing at least two per cent of that. It’s important that small businesses plan ahead to budget for this increase.
If you’re unsure about what you need to do with regards to putting the workplace pension in place, or the likes of payroll integration, speak to your local bookkeepers as they will of course be fully clued up on all aspects of it.