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Pensions Auto-Enrolment: An Update

Tax

Author: Kay Augustus, LHP Payroll Manager

Covid or no Covid, employer compliance remains. With the auto-enrolment (AE) compliance cycle you may be wondering ‘what exactly should I be doing right now’? The answer is, it’s still business as usual! Regardless, you and your employees still need to make pension contributions, the pandemic doesn’t make any difference to procedure.

Despite the pandemic, auto enrolment duties still apply whether staff are working, have taken furlough, or are on a funded placement like Kickstart. The minimum contribution set by the government that employer and employee must contribute is 8% combined of qualifying earnings. This is split where employee pays 5% and employer 3%.

If you’re using Kickstart you need to run your normal payroll process. Both contributions you pay and staff pension contributions due under your pension scheme are calculated on qualifying earnings.

Regardless of government support or whether someone is a new team member, you must assess staff and put them in a pension if eligible. You may be able to postpone the procedure for up to 3 months.

The AE regime has its own ‘cycle of responsibilities’. This involves regular re-enrolment and re-declaration duties every 3 years. Certain staff who left the pension scheme must be put back in it. And you then must submit a re-declaration of compliance to the Pensions Regulator, setting out how you met duties.

LHP Payroll can keep you compliant and advise on any postponements for employees. We can also complete your re-enrolment and re-declaration with the Pensions Regulator.

Many small business employers have completed their first re-enrolment. LHP can assess your staff for re-enrolment on the third anniversary of staging/duties start date. Although there isn’t the option to use postponement for re-enrolment, there’s some flex on dates if your reasons for struggling to get re-enrolment carried out on your third anniversary are related to the pandemic.

Let’s Talk

LHP is here to help get the figures right for pension contributions which we appreciate can be extremely complex. If you’d like us to review this for you, please don’t hesitate to get in touch. Let’s Talk.

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