Services for Young Children

Important information on Workplace Pensions

In August 2012, SfYC alerted providers to the need to familiarise themselves with the changes in pension reform and provided signposting to the Pension Regulator website for information.

SfYC have produced a brief PowerPoint slideshow to help settings understand their obligations in more detail. The slideshow can be accessed here

An explanation of the content and some further detail for those who cannot access PowerPoint follows:

What will I need to do as an employer?

Employers will need to:

  • Automatically enrol certain workers into a pension scheme

  • Make contributions on behalf of their workers

  • Register with The Pensions Regulator ('the regulator')

  • Provide workers with certain information about the changes and how they will affect them.

As staging dates for auto-enrolment become closer, providers are again reminded that they will have statutory responsibilities to comply with the change in pension law. Automatic enrolment dates are illustrated below but you will need to check your own staging date;

Employer size (by PAYE scheme size) or other description

Automatic Enrolment duty date

From

To

50 to 249 members

1 April 2014

1 April 2015

Test tranche for less than 30 members

1 June 2015

30 June 2015

30 to 49 members

1 August 2015

1 October 2015

Less then 30 members

1 January 2016

1 April 2017

Employers without PAYE schemes

1 April 2017

...


How do I check my specific staging date?

To check your staging date, the Pensions Regulator website have a helpful tool which you can use.

You can access this from this link and a screenshot is pictured below:

http://www.thepensionsregulator.gov.uk/employers/beginners-guide-to-auto-enrolment.aspx

pensions pic 1

If you click on the link to find your staging date, you can enter your PAYE number and follow the on screen instructions. This page also contains links to your duties as an employer, how to enrol your staff and your employer minimum contributions.

It is important to bear in mind that you must enrol all workers who:

- are aged between 22 and the State Pension age

- earn at least £10,000 a year

- work in the UK

What information do I need to give my employees?

You must write to each member of staff to tell them how automatic enrolment affects them and about their rights. This is a legal requirement. The Pensions Regulator has provided an employer letter template tool (Letter templates for employers tool). Find the right templates for your business and then write to all your staff accordingly.

Where can I get professional advice on finding a pension provider?

You will need to find a pension provider who will run your pension scheme and who will be able to provide you with professional advice.

On the Pension Regulator website you will find a link to the page below which will help you find the most appropriate help and advice. Without this you will not be able to set up your scheme, although your are, of course, able to source your own help and advice through other means if you feel able to do so.

Pensions Pic 2

Once you have chosen your preferred provider, you will need to supply them with information about your workforce.

As a minimum, the pension provider will need to know name, address, date of birth and National Insurance number for each employee so please ensure you comply with your own data protection policy and, if necessary, obtain the appropriate permission from your employees.

Is running a workplace pension going to cost my business any money?

In short, yes! You will need to make pension contribution payments on behalf of your employees and you will need to pay an employers' contribution as well. Your employer contribution will vary but will start at around 1% rising to a minimum of 3% by 2018.

You must make sure your finance and administration systems can pay any pension contributions you take from your employees into your staff pension scheme by the date you've agreed with your provider.

This date must be no later than the 22nd day (19th if you pay by cheque) of the following month and you may be fined by The Pensions Regulator if you pay late or don't pay the minimum contribution for each member of staff.

As with any cost incurred in running a business, it is therefore incumbent on you to understand the financial impact of this and to plan for the business to remain sustainable.

You can download a cashflow forecast template to help you in budgeting for the impact of this from the SfYC website:

http://www3.hants.gov.uk/childrens-services/childcare/providers/business-support/cash-flow.htm

Bespoke help with budgeting is available from the SfYC professional options portfolio of purchased services - just ask your local childcare development co-ordinator for details.

In summary:

  • Get advice and agree your pension scheme in good time before your staging date

  • Understand the costs of the scheme and how you can afford employers' contributions

  • Put in place appropriate staff communications

  • Think about your business and finance, cashflow and sustainability and review your pricing and operational costs if necessary

For further information and detailed explanations visit:

http://www.thepensionsregulator.gov.uk/index.aspx

SfYC is unable to offer advice regarding pensions or pension reforms, either to businesses or individuals but settings seeking generic help with this change should arrange to see their business support officer at a local business support synergy. Surgery times and venues are advertised through the blog and are also available from local development team offices.