As an employer, you must by law enrol all eligible employees – in most cases the majority – into a pension scheme and also offer it optionally to non-eligible employees. THIS IS YOUR OBLIGATION.
Among your duties, the law says you must:
- Provide a qualifying pension scheme to all employees
- Register the scheme with the Pensions Regulator
- Inform all employees about the changes, the scheme, and their options
- Make it clear that all eligible employees must be enrolled automatically, and even if they don’t want to take part, they must start off ‘in’ and then opt ‘out’
- Keep non-eligible employees informed about their rights within the scheme
- Pay employer contributions for eligible employees into the scheme within an agreed time period.
MAKE SURE YOU UNDERSTAND…
The cost of getting it wrong could be BIG – as an employer, you can face heavy financial penalties just for failing to
understand and comply…and if you wilfully break the rules, you could even end up in prison for up to two years.
There are three stages of official response to non-compliance:
1 First, you will be served a notice of non-compliance, ordering you to put things right within a given timeframe
and pay unpaid contributions
2 Then a fixed penalty notice will give you four weeks to get in line or pay a fine of £400
3 Finally you will be served an escalating penalty notice that will cost from £50 to £10,000 PER DAY depending on the number of employees.
- 1-4 employees £50 per day
- 5-49 employees £500 per day
- 50-249 employees £2500 per day