Pensions auto-enrolment update: January 2016
Jeremy Clarke and Christine Scott of ICAS provide a summary of the latest auto-enrolment updates from The Pensions Regulator, to assist members in practice.
With 44% of business advisers who have spoken to The Pensions Regulator (TPR) saying that their clients will rely on them completely to help with automatic enrolment, make sure you are up to speed with all aspects of the process.
Fill in any gaps in your knowledge by reading TPR's business advisers guide.
Automatic enrolment: what your client needs to do if they have no staff to enrol
Even if none of your clients' staff are eligible for automatic enrolment, they can still ask to join a pension scheme. A scheme only needs to be put in place if they ask to join or their circumstances change, and they become eligible for automatic enrolment.
Your clients will still need to write to their staff to let them know what's happening and complete a declaration of compliance.The frequently asked questions section on TPR's website provides more information on what to do if there aren't any members of staff to be automatically enrolled.
Automatic enrolment: companies with no staff – what action to take?
Companies with no staff other than directors may not have any automatic enrolment duties.
If you have clients who do not have staff and who receive a letter from TPR, you should advise them to get in touch with the regulator in writing to explain their circumstances.
Go to TPR’s website to find out more information or to view a video on what your clients should do if they have a sole director or if the only other people working at the company are directors.
Automatic enrolment: urge your clients to prepare early to avoid risking a fine
TPR has found a significant minority of employers have received compliance notices and fines because they have left it too late to complete their duties on time.
Employers should plan ahead and allow time to choose a scheme, assess their staff and tell them about automatic enrolment.
It’s important to understand what to do and by when, and this will depend on the circumstances of your clients and their staff.
To work this out look at the timeline and tasks detailed on TPR’s website.
Tax relief considerations for scheme selection
TPR has updated the tax relief content provided on its website for employers and business advisers to clarify the differences between net pay arrangements and relief at source arrangements.
The content highlights that employers should bear this in mind when choosing a pension scheme for their staff. Relief at source arrangements are better for lower paid staff, while net pay arrangements mean higher rate tax payers need to complete a self-assessment to receive the correct tax relief.
Information for employers on tax relief considerations can be found at 'Choose a pension scheme (or check your existing one)' and information for business advisers can be found at 'What to consider when choosing a scheme'.