Pension answers to pressing problems

As the Pensions Regulator, armed with fines and requirements, starts to get heavy with businesses, the RIBA offers a helping hand

Like all businesses, practices should now have received notification of their deadline. In this quarter alone, 100,000 employers are staging, rising to over 200,000 in the final quarter of 2016. Practices will need help.

The Pensions Regulator is aware that practices want to do the right thing by their employees but smaller firms are more likely to leave things to the last minute, and will need to work out what their automatic enrolment duties are. Failure to comply with these duties could result in the regulator issuing a compliance notice which could carry a fixed penalty of £400.

The regulator will check that all buinesses are complying with the new rules. A practice found to be in breach of any of their responsibilities will receive a notice of enforcement. Fines from £50 for the smallest firms up to £5000 can be levied where practices have failed to register with the regulator, offered their employees incentives to opt out or have failed to meet monthly contributions.

Practices will need to keep a close eye on cost, changes to payroll process and internal administration procedures. The potential penalties can easily be avoided with the right advice.

At RIBA Pensions, advised by Moore Stephens, we believe that auto enrolment is 80% compliance, 15% pensions and 5% investment.

The Pensions Regulator has published over 250 pages of notes to help practices comply with their new responsibilities.  This can be a minefield of information, adding pressure to practices worried about getting it wrong.

Fines from £50 for the smallest firms up to £5000 can be levied where practices have failed to register with the regulator, offered their employees incentives to opt out or have failed to meet monthly contributions

Auto enrolment compliance requires several things of practices. First, they must categorise workers: not all workers are ‘eligible’ – that would be too easy ­– some are ‘non-eligible’ and some are ‘entitled’. Secondly, a number of statutory communications need to be issued to workers at different time lines, according to their defined worker category. Records are important: an audit of opt-ins and opt-outs must be stored for six years, including members who are not eligible now, who become eligible and members who have opted out but then change their mind. Detailed records relating to all movements must be kept up to date at all times.

Payroll information needs to be accurate and ensure the correct contributions are paid for each member at every payroll run, including increases in line with any changes in salary. Finally, choosing a pension is part of the compliance; making decisions about investment choices offered to the Members and ensuring the scheme can cope with future changes in auto enrolment legislation.

The RIBA Pension has been established to help practices provide a simple quality, qualifying workplace pension scheme (QWPS) that meets all the requirements for auto enrolment. It guarantees acceptance for all practices and allows practices to establish the auto enrolment solution now while postponing contributions until their staging date. 

Stuart Stroud is director of employee benefits at Moore Stephens