Posted in General News and Newsletters
Since we issued our last employer newsletter in March 2017 a further 1,300 employers and 9,000 employees have joined Workers Pension Trust. As at 30 September 2017 we now provide a workplace pension for 3,800 employers and over 44,000 employees.
By law, from 6 April 2018, the minimum amount employers pay into the Scheme will be 2% of pay, and the amount staff put in will rise to 3%.
On 6 April 2019, this will rise again to 3% from employers, and 5% from staff.
The table below shows the minimum contributions and the date when they must increase.
| Staging Date to 5 April 2018 |
6 April 2018 to 5 April 2019 |
6 April 2019 onwards |
|
| Employer Contribution | 1% | 2% | 3% |
| Employee Contribution | 1% | 3% | 5% |
| Total | 2% | 5% | 8% |
It is important that you are ready for the contribution increases so that the correct contributions are deducted at the right time. Where underpayment is detected, Workers Pension Trust has an obligation to report non-compliance to the Pensions Regulator.
It is important to keep your staff informed of the pension contribution increases. We have provided a template letter for employers to use to remind staff about the contribution increases in advance of April 2018 and April 2019. Communicating with workers early will help to minimise queries. Click on the link to view the template letter Contribution Increase Reminder letter
Workers Pension Trust uses the net pay arrangement for tax relief. This means that the employer deducts the pension contribution from the employee’s gross earnings before it deducts income tax via PAYE. If an employer has used the wrong tax relief basis when running payroll, this can result in the incorrect calculation of employee contributions which will need to be corrected. It is important to check that you are deducting contributions based on the net pay arrangement. For further information on tax relief click here.
The Pensions Regulator reports that whilst compliance with the law remains high, a small minority of employers are failing to meet their duties. The Regulator is maintaining a tough approach towards those who try to get away with not giving their staff the pension they are due.
Their quarterly compliance and enforcement bulletin shows where they have used their powers including the use of fixed and escalating penalty notices.
The Regulator is now taking the additional step of publishing on their website cases where they have exercised or considered exercising their powers. The report includes the employer’s name, the penalty amount, and the first part of their postcode.
The Regulator has conducted spot checks covering Glasgow, South Wales, Manchester, Sheffield, Edinburgh and Birmingham. Northern Ireland will feature in due course!
Employers should be wary of falling for a scam involving the sale of fake certificates that suggest they do not have workplace pension duties. The Pensions Regulator is investigating at least one company offering employers what it describes as “Certificates of Auto Enrolment Exemption”.
A number of employers have been persuaded to pay for the documents, with the scammers claiming the paperwork means that the holders do not have any workplace pension duties. While employers have been charged £58 for the certificates, the documents are worthless. The Pensions Regulator does not produce or accept any such documents as evidence of automatic enrolment exemption.
Given the significant growth in membership, Workers Pension Trust has extended its services to include Group Life Assurance. Life Assurance is viewed as one of the most highly-valued employee benefits that a company can offer its staff.
The Group Life Assurance Scheme is open to all Workers Pension Trust employers. Premiums start from as little as £1 per week per employee, with three levels of lump sum cover available - £25,000, £50,000 and £100,000. There is no medical underwriting required. If you are interested in the Scheme’s Group Life Assurance please contact us on 028 9087 7142.
Our experience of handling death claims shows that far too many employees die without having completed an Expression of Wish form.
An Expression of Wish form can help speed up the time it takes for families or beneficiaries to receive payment of the pension fund in the unfortunate event of a death.
We would ask you to encourage your employees to complete an Expression of Wish form, which is available for download from the employee resources section of our website.
The Trustees have the absolute, final discretion as to who the benefit is paid to, however the employees wishes are taken into account.
When it’s time for you to re-enrol, make sure you are prepared. Our website includes a 5-step guide to re-enrolment.
In brief, every three years on the anniversary of your staging date you will be required to:
A comprehensive guide to re-enrolment can be found on the WPT website. Click here.
From 1 October 2017, start-up businesses will no longer be given a staging date when their automatic enrolment duties will start. Instead they will have duties as soon as they employ someone for the first time. This is known as their ‘duties start date’.
When a new business starts paying a member of staff more than £113 per week, they must set up a PAYE scheme with HMRC. They must also assess their staff to work out if they need to be put into a pension scheme.
Within 5 months of taking on staff, new businesses must complete a declaration of compliance to tell the Pension Regulator what they have done to meet their duties.
To find out more about auto-enrolment duties for new employers, please click here.
It is becoming more and more apparent that auto-enrolment is not a one-off exercise but an on-going process. Employers must remember to carry out regular updates and processes such as
When the Pension Regulator carries out a spot check on an employer they will expect to see evidence of all of the above – so the message is be prepared!