Auto Enrolment is Changing: Don't get left behind!
Auto enrolment has well and truly evolved since the rollout began in 2012. In 2017, we have seen the largest number of employers reaching their staging date. There are a number of changes coming over the next twelve months that payroll bureaus need to be aware of. Auto Enrolment is changing - New Employers, Phasing & Automatic Re-enrolment Worryingly, according to research conducted by The Pensions Regulator (TPR), 49%, almost half of accountants asked did not know that new employers would have AE duties. Many of your new employer clients will need help when it comes to AE. The rollout of the staging dates process will end in February 2018, but from October this year all new employers will be affected by auto enrolment immediately. From April 2018, we will also see increases to the pension contribution come into effect which will affect both employers and employees. Again, in April 2019, there will be an additional increase to the contribution rate. Automatic re-enrolment has already started to hit the larger companies. Every three years, all employers must complete their re-enrolment duties and complete a re-declaration of compliance. There are a number of mandatory steps that must be completed in order to be fully compliant. This free webinar is full CPD accredited where attendees can benefit from 1.5 CPD hours. Places are limited so please register early to secure your place. Agenda Auto Enrolment & New Employers Increasing Minimum Contributions Integration between payroll & pension providers Re-Enrolment & Re-Declaration of Compliance How BrightPay Automates Auto Enrolment Introduction to BrightPay Connect For more information visit https://www.brightpay.co.uk.
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Auto Enrolment is Changing: Don't get left behind!
- 2. 1/15/18 2 -Auto Enrolment: What’s the point? Auto Enrolment: What’s the point? • People living in the UK are healthier and living longer • Majority of people are not saving enough for retirement • Auto Enrolment brought in to tackle this issue • Eligible employees must be enrolled into an auto enrolment pension scheme • Other employees have the option to opt in or join a scheme Auto Enrolment: What’s the point? • Auto enrolment has well and truly evolved since the rollout began in 2012 • 750,000 employers reached their staging date last year • Final year of the auto enrolment rollout • Number of changes coming within the next 12 months -Auto Enrolment & New Employers
- 3. 1/15/18 3 Auto Enrolment & New Employers • Before now, a staging date indicated the start of an employers auto enrolment responsibilities • From 1st October 2017, new employers will be affected by auto enrolment 49% of accountants didn’t know that new employers would have AE duties Auto Enrolment & New Employers • Duties start date: the date that your first member of staff starts work which kick-starts when your legal auto enrolment duties begin • Employers must be ready to comply with AE as soon as the first employee begins employment Auto Enrolment & New Employers • Once registered as an employer with HMRC, an employer must inform TPR of point of contact and choose a suitable pension scheme Auto Enrolment & New Employers • Employees must be assessed to determine if they need to be automatically enrolled • Eligible jobholders must be enrolled into a qualifying auto enrolment pension scheme • Employer & employee must make contributions to the scheme • All employees must receive communications informing them of how auto enrolment affects them
- 4. 1/15/18 4 - As of 1st October 2017, when will new employers have auto enrolment responsibilities? -Increasing Minimum Contributions Minimum Contribution Amounts • It is an employer’s responsibility to make sure that they are prepared for these new contribution levels • Employers can contribute more than the minimum, reducing the employee contribution Total must be at least (% of qualifying earnings) Employer must contribute (% of qualifying earnings) October 2012 to 5 April 2018 2% 1% 6 April 2018 to 5 April 2019 5% 2% 6 April 2019 onwards 8% 3% Auto Enrolment & New Employers • Payroll software should automatically calculate the phased increases in contributions • When offering auto enrolment as a service, it will be your responsibility to make sure that the correct amount is being deducted • New employers after these dates will immediately be required to comply and implement the total minimum contribution rate
- 5. 1/15/18 5 - Integration between Payroll & Pension Systems Auto Enrolment & New Employers • Some providers have enabled direct integration • This allows payroll and pension systems to communicate with each other • Eliminates the need to export and save the data file to the PC and manually upload the data • With integration, data can be sent directly to the pension provider at the click of a button Auto Enrolment & New Employers • Useful for bureaus with a number of clients – reduces errors and workload • NEST, Aviva & Smart Pension • Other NEST APIs – validate groups and payment sources & approve payments from within BrightPay • Streamlines setup and ongoing tasks when using NEST - Re-Enrolment & Re-Declaration of Compliance
- 6. 1/15/18 6 Automatic Re-Enrolment • Duties vary depending on whether you have staff to enrol • Employer choose their enrolment date from a 6 month window: 3 months either side of the third anniversary of the staging date • Employers can align re-enrolment with the company’s financial year or avoid seasonal peaks • The re-enrolment date applies to all staff & postponement cannot be used Automatic Re-Enrolment • At re-enrolment, certain employees must be re-assessed • Previously opted out • Voluntarily ceased active membership of a qualifying scheme Automatic Re-Enrolment • You must enrol anyone who: • Left the pension scheme more than 12 months before re-enrolment • Aged 22 to state pension age • Earns over the earnings threshold (currently £10,000 per annum) Automatic Re-Enrolment • You have the option to enrol various employees: • Directors • Partner in a Limited Liability Partnership • Left the scheme within 12 months of the re-enrolment date • Given notice of the end of their employment
- 7. 1/15/18 7 Automatic Re-Enrolment • These employees must be put back into a pension scheme within 6 weeks of the re-enrolment date • Must write to enrolled employees to inform them that they have been re-enrolled • Communication must be completed within 6 weeks of the re- enrolment date • You do not have to write to other employees Re-Declaration of Compliance • All employers must complete the re-declaration of compliance • This must be completed even if no employees have been re-enrolled • Informs the Pensions Regulator that you have complied with your re-enrolment duties • Payroll software should be able to handle re-enrolment - How BrightPay Automates Auto Enrolment Software Solutions • HMRC & TPR recommend that employers use payroll software that supports auto enrolment • API integration between payroll and pension systems is also advisable • HMRC Basic PAYE Tools users – does not properly handle auto enrolment – most at-risk group for AE non-compliance
- 8. 1/15/18 8 Software Solutions • Some payroll software allows employers to seamlessly process auto enrolment • Payroll & pension integration – NEST, Aviva and Smart Pension • Alerts for new employer regarding their duties start date • Alerts for employer regarding their re-enrolment duties • Seamlessly handle the increase in minimum contributions - Introduction to BrightPay Connect - New Cloud Add-On Bureau Client Dashboard Multiple Users Safe and Reliable Automatic Cloud Backup Employee Self service