40 . Glasgow Business August 2014


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required to contribute a minimum of three per cent of qualifying earnings between £5,772 and £41,865, and employees will have to contribute four per cent which, together with tax relief of one per cent, will make a total of eight per cent. Tese amounts are being phased in during a six-year period. If your business has an existing


pension scheme, it may be that this can be used to meet your obligations. If it doesn’t or you don’t have a scheme in place, then you will need to decide how best to meet the requirements of the pension reforms. A proper strategy is essential,


as employers need to be mindful too of the requirements and restrictions of the Financial Services Act. “Te reforms are most likely to


have an impact on small business owners, who may not have a dedicated service within their staff to manage the transition to auto enrolment,” said Colin Giffen, Director of Corporate Benefits at Henderson Stone. “But this isn’t something that


companies can afford to ignore, because the financial penalties are real and could hit them hard. It’s in every business owner’s interest to prepare for auto enrolment sooner rather than later, as much as anything else to avoid the rush we feel could take place as the deadline approaches and to avoid unnecessary fines.” Colin said company owners


should consider the following points highlighted by Henderson Stone when it comes to preparing for auto enrolment:


Nominate a point of contact Tis person will be in regular contact with the Pensions Regulator.


Know your staging date Tis depends on the size of your business, but every company will be given 12 months notice of this by the Pensions Regulator. You can call the Pensions Regulator on 0845 600 1011 to find out your staging date (you’ll need to know how many employees you have on your payroll and your PAYE reference).


Assess your workforce Determine the various employee types across your workplace to


assess who is eligible for employer contributions and auto enrolment.


Review your existing pension arrangements Your current scheme may meet Pensions Regulator auto- enrolment requirements already. But take this opportunity to examine whether your existing arrangements deliver the best outcome in terms of meeting your obligations and delivering the best outcome for your employees.


Communicate changes to your staff Tere are legal obligations in place and a specified timescale for when employees should be kept informed of auto enrolment. Tey will need to know what to expect, how they may be affected, what changes there will be to existing members, and what it might mean to those currently not members.


Automatically enrol eligible staff into a pension scheme Te automatic enrolment of eligible jobholders should start when you reach your staging date. You’ll also have to manage


“There are legal obligations in place and a specified timescale for when employees should be kept informed of auto-enrolment”


opt-outs, offer opt-in rights to non-eligible jobholders, offer joining rights to entitled workers and continuously monitor for changes in a worker’s status. In other words, your workforce will need to be reviewed each time you run your payroll.


Register with the Pensions Regulator and keep records Te company is required to register with the Pensions Regulator within four months of the staging date (you can do this online) and then re-register roughly every three years aſter that. Record-keeping processes must be in place and records kept for at least four years to demonstrate compliance and be available if requested by the Pensions Regulator.


Contribute to your workers’ pensions Tere is a range of contribution schemes available to choose from, dependent on how much your employees earn, what contribution levels you decide on and whether you are considering a form of salary sacrifice.


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