Start-ups alerted to instant pensions duties
Wednesday 10 May 2017
New businesses which start up from October this year are being warned they will have instant pension duties once they take on a member of staff.
The alert comes as the current schedule for employers to meet their automatic enrolment duties comes to an end. All businesses which existed before April 2012 have now passed their staging date.
More than half a million employers have now complied with the law and have integrated automatic enrolment into the day-to-day running of their business.
From October, new businesses will need to put pension plans in place alongside all the usual tasks associated with setting up a business.
Executive Director of Automatic Enrolment Charles Counsell said: ‘More than seven million are now saving into a workplace pension and automatic enrolment is now simply part of running a business.
‘From October, as soon as you take on staff you will have duties towards them. Anyone setting up a business and taking on staff will need to work automatic enrolment into their plans. I urge new businesses to visit our website for our new guidance on what they need to do.”
The advice to employers comes as research published today by TPR demonstrates the roll out of automatic enrolment continues to run smoothly.
The employer awareness and understanding report shows the vast majority who are reaching their staging date this year are confident they will be compliant with their duties.
In addition almost half of new businesses who have only been trading for two or three months said they had already taken their first steps to meet their duties, by determining how many staff they need to enrol into a pension scheme.
The survey also shows that employers, including new businesses, continue to think that automatic enrolment is good for their staff.
A similar survey of business advisers also shows that the majority of business advisers are already helping their clients with automatic enrolment.
- A total of 476 employers, each of whom had a staging date when their workplace pension responsibilities begin between January 2017 and January 2018, were interviewed during November and December 2016.
- Each was asked about their awareness and understanding of automatic enrolment and their responsibilities under the law. 86% of those who were to stage between January and April were aware of automatic enrolment, along with 79% of those staging between May and November and 65% of those due to stage in January 2018.
- However, just 65% of small businesses interviewed and 56% of micro employers said they understood their responsibilities fully. 60% of those who were to stage between January and April reported they had completed working out how many of their staff they needed to enrol in a pension scheme, along with 47% of those staging between May and November and 43% of those due to stage in January 2018.
- 70% of those who were to stage between January and April believed that the introduction of automatic enrolment is in principle a good idea for their staff, along with 69% of those staging between May and November and 81% of those due to stage in January 2018.
- A total of 452 financial professionals were interviewed during November and December 2016. 89% of independent financial advisers, 89% of accountants, 97% of payroll administrators and 79% of bookkeepers reported that they were already supporting clients with automatic enrolment.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
Ciara Bridge-Butler 01273 662018