We are sure you all know that even small businesses are obligated to setup some sort of pension plan for qualified employees under the auto-enrolment rules. Further to this, employers are now required to make contributions on behalf of all eligible staff members. This really needs to be setup as soon as possible to avoid any fines and more importantly, protect your employees.
Very recently, an SME Healthcare company was found to be ‘dodging’ pensions. In summary, a pensions scheme was offered to their staff, money was being deducted from the employees’ wages, however, the money was not making its way into the pensions pot. This offence was taken very seriously; and The Pensions Regulator fined the firm.
Do you have a pension setup for your business? Here are some items to consider and help you get setup:
You will need your PAYE reference to find out your staging date. This reference can normally be found on letters you have received from The Pensions Regulator. The Pensions Regulator website can help you identify your staging date and also provide some useful information regarding setup.
Understand whether or not you are required to establish a workplace pension. If your employees earn less than £486 a month, then you will have to provide a pension scheme but not contribute. If they earn over £486, then you will have to contribute. Employees may decide to opt out of your pension plan – but that’s their decision.
Do your Research
There are lots of different options out there, invest some time to do your research and find the scheme which works best for your business, the Government have setup some specifically for SME’s, with smaller budgets. Recommendations are great too but remember that pensions benefit different types of businesses with a varying number of employees.
Avoid Pension Fines
As with the earlier mentioned case, The Pensions Regulatory are acting fast and being firm. Fines are not only given to firms whom are ‘dodging’ pensions but failure to establish a qualifying pension scheme on or before your staging date can result in a £400 (plus) fine, and additional daily fines based on the number of workers affected. A business with 1-4 employees will receive a £50 daily fine, 4-49 employees it is a £500 daily fine, 50-249 employees, it is a £2,500 daily fine. These fines can be avoided through acting smartly and being organised.