Why do you need to provide a workplace pension?
​What are your obligations?
​Choosing a pension scheme
​Working out who to put in your pension scheme
​Communicating with your staff
​Declaring your compliance to the Pensions Regulator
​Re-enrolling employees
​Deduction and paying over contributions correctly
​What happens if an employer does not comply?
​

As an employer there are obligations that you need to fulfil to ensure compliance with your employee's workplace pension regulations.

This article covers the duties you have as an employer, the implications if you don't adhere and some examples of employers who have failed in meeting their duties.

Auto enrolment was introduced to ensure that all eligible employees have access to a workplace pension.

Workplace pensions are an opportunity for people to improve on their pension income when they retire.

As an employer, your workplace pension duties are:

In 2018, 12% of employers felt that it was too difficult to keep up with their ongoing duties. The most common difficulty faced was the time it takes to fulfil their duties.

At Payfit, our app is fully set-up to help you comply with your auto-enrolment and re-enrolment obligations so that your time can be more wisely spent.

There is no timeline on when to choose a pension scheme, but you will know when your legal duties start and setting up a pension scheme can take time so ensure that you allow yourself the time to complete the set up of your scheme before your enrolment duties start.

Unsure how to choose a pension scheme? Don't worry, we have that covered. Click here for more information.

Next, you need to work out who to enrol in your pension scheme.

If your employee is:

They must be auto enrolled in to your pension scheme.

Still unsure? No problem! Here at Payfit our clever app is set up to assess your employee's eligibility automatically and you will receive a notification if you have an employee to enrol.

It is important that you let your staff know about their eligibility to be auto enrolled, and any subsequent changes to their workplace pension scheme including you postponing enrolling your employees in to the pension scheme

You have 6 weeks after the start of your duties to write to:

You have 5 months from the start of your legal duties to declare your compliance to the Pensions Regulator.

This is confirmation of how you have met your legal duties.

If your employees opt-out of their workplace pension, you have a legal duty to re-enrol them every 3 years provided that they still meet their eligibility criteria.

An employee can opt out again if they wish after their first contribution has been taken.

You have a time limit from the time you deduct contributions to when these should be paid to your pension scheme.

This will depend on whether we are looking at employee or employer contributions.

Employer contributions must be paid to the scheme by the agreed date held between the employer and the scheme.

Employee contributions must be paid to the scheme no later than 22nd of the month after the contribution was taken.

The Pensions Regulator oversees the compliance of employers to their pension scheme duties.

There are 4 stages for employers who fail to comply with any of their auto enrolment duties:

This is an action that can be done my e-mail, letter, phone or in person by the Pensions Regulator who will offer advice and support on how to work towards becoming compliant.

This is a formal notice by post instructing the employer to comply with any failed duties.

It is the first stage that also has potential financial repercussions for the employer including:

This is a formal action taken against employers who consistently or deliberately fail to comply.

The initial penalty notice is a fixed fee of £400 to be paid within a timeframe set by the Regulator.

This can be increased to an escalating penalty notice if this has been driven from a failure to comply with a statutory notice and ranges from an increasing daily penalty of £50 to £10,000 dependent on the number of employees.

A civil penalty notice, which ranges from a flat £5,000 to a flat £50,000 can be sanctioned where employers have failed to invest pension contributions in to their scheme.

Court action will be taken if an employer has not paid a penalty notice that they have been given which could lead to prosecution.