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The new laws on workplace pensions mean that every employer in the UK will be affected by auto enrolment.
And, whilst the majority of GP staff are in the NHS Scheme, consideration is needed for others. Dental staff are often not in the NHS Scheme, so dental practices will need to make arrangements to comply with their obligations.
What is auto enrolment?
Auto enrolment has been designed to encourage individuals to join and stay in a pension scheme to save for their retirement.
This means that employers will automatically enrol eligible jobholders into a qualifying workplace scheme on a date nominated by The Pensions Regulator, known as the staging date. Should those employees want to opt out of auto enrolment they will need to contact the provider of the scheme.
When do I have to start?
As an employer, your staging date is based on the number of employees on your payroll at April 2012. Go to The Pension Regulator’s website and use their tool to find out your staging date: www.thepensionsregulator.gov.uk
Keep in mind, it could take more than six months to set up a pension scheme, ahead of your staging date.
Who do I need to put into the qualifying workplace pension scheme?
Your workforce must be assessed either at your staging date or at the end of your deferral period, whichever is the later, and then each time the payroll is run. This is to ensure that your workforce is categorised correctly and that you enrol eligible jobholders into the qualifying workplace pension scheme at the right time.
Eligible jobholders are currently:
- aged 22 – state pension age
- working in the UK
- earning over £10,000 a year.
Other workers who fall outside these categories must be included if they ask.
Things to consider
When forecasting costs for auto enrolment, some key points to consider include:
- Do you have an existing pension scheme in place?
- Does this comply with the new rules or do you need a new qualifying scheme?
- Will your payroll software manage the processes for you?
- Will your payroll provider do some of the mandatory tasks for you?
- Who in your business will be responsible for this project?
- Can someone else absorb their work to enable them to focus on this?
- Will you consider using postpone-ment, contractual enrolment, changing your pay frequency?
- Who will manage these changes for you?
- Once the scheme is set up, the minimum employer contributions could be as much as 4% of the employees’ basic pay. Can your practice afford this?
Getting your practice ready for auto enrolment is likely to be time consuming and giving yourself enough time for the strategic and technical planning may bring benefits in the long term. The impact of this legislation cannot be postponed nor avoided and penalties will be enforced for noncompliance.
For more information contact Julie Bruce at j.bruce@endeavour.law
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