Every employer in the UK will be required to enrol qualifying staff (those between 22 and the state pension age and who earn over £10,000 a year) into a pension scheme and pay into it. Small firms will begin this auto-enrolment process in 2015 and will be enrolled by 2017, unless they were founded after 2012, in which case their staging date – or enrolment deadline – will be before February 2018. Although employees are able to opt out, employers can’t.
The most important way small firms can prepare for auto-enrolment is by finding out their staging date, on which their enrolment duties come into effect. The Pensions Regulator will inform every employer of their staging date by letter, and its website also has a tool for firms to identify it. It’s recommended that small firms start planning for the changes 12 months before this date.
Employers who already have an existing pension scheme will probably be able to keep it – but it’s worth checking that the scheme qualifies under the auto-enrolment rules. The amount employers and employees pay into it may have to be altered, however.
All other employers need to set up a pension scheme. Check out the Pensions Regulator website for guidance on choosing the right one.