According to a recent report published by The Pension Regulator, the number of micro-employers aware of their auto-enrolment pension responsibilities has dropped since last year. Only 82% are clued up, compared with 88% in 2018.
If you’re part of the 18% club, it’s time to act. If you fail to comply then the Pensions Regulator (TPR) will act. Typically, this starts with a notice and escalated to penalties which can be avoided with just a few simple steps.
Read on for a closer look at auto-enrolment, the importance of the scheme and how further awareness can help employers.
Auto-enrolment scheme is a success, but¦
The Auto-enrolment Pension scheme (AE) was first introduced in 2012 and has helped employers ensure eligible staff are gaining contributions and are aware of what they are entitled to.
This applies to workers between the ages of 22 and 65 (the current State Pension Age) who earn over £10,000 annually. It is then the employer’s responsibility to put them into the AE scheme and contribute to it.
Since 2012, the percentage of people that are in a workplace pension scheme has risen from 55% to 87%. The Pension Regulator says there are now 10 million people per year automatically enrolled into the scheme which is a huge achievement.
However, the number of micro’ employers (those with 9 staff members or less) that are not aware or fulfilling all five criteria has decreased from last year.
This decline has sparked calls for more Pension Scheme education for businesses across the UK. Micro employers are the only offenders though, with awareness among medium sized employers also sliding from 98% down to 94% since 2018.
Decrease in awareness is avoidable
Darren Ryder, Director of Automatic-enrolment, commented in the report that there is still plenty of awareness to be created despite the ongoing success of the scheme.
Although most employers are successfully meeting their AE duties and doing the right thing for their staff, some willfully fail to do so, he says with regards to the latest figures. Our regular advertising campaigns reach a wide range of employers. This activity means that employers have no excuse to be unaware of their duties.
The report states that enforcement against non-complying businesses will continue. However, it will be knowledge that sees the success of AE scheme in the long-term.
According to the report, it’s estimated that the total saved by workers within the scheme in 2018 was £90.4 billion. This is a huge increase of £16.8 billion from 2012 and highlights the importance of a successful future for Auto-enrolment.
Helping to grow awareness of all areas of the scheme will benefit both the business and the employer. The report comments that Response to Intervention (RTI) strategies will further aid this goal. The Pension Regulator plans to use data-led regulations going forward.
What are an employer’s responsibilities?
According to The Pension regulator, a fully aware’ employer must cover five criteria:
- Keeping records of all AE activities
- Monitoring the ages and earnings of staff to check whether they are eligible to join the pension scheme
- Writing to staff to join the pension scheme
- Managing requests to join or leave the pension scheme
- Paying contributions to the staff members’ pension scheme
Talk to an auto-enrolment expert
With the latest legislation surrounding the Auto-enrolment Pension Scheme making it compulsory, all eligible employers and businesses can feel the benefits of joining.
However, joining the scheme can be complicated and time consuming. If you need assistance from a team of professionals, look no further than UWM Accountants – an expert team of local cloud accountants in Leeds. We provide a comprehensive auto-enrolment services, which takes the stress and strain off your shoulders.
For more information, contact us today on 0113 231 0202. We look forward to hearing from you.
