2012 saw some of the biggest changes to pensions in a generation. Under the changes, you have a legal duty to offer a pension to members of your workforce who meet certain criteria and contribute towards it. This means new processes and more costs for you.
What we found with some of our corporate clients and businesses, was
- A rush to put anything in place urgently to comply with the rules around contributions without detailed understanding around some of the other key requirements.
This resulted in
- Poor selection of scheme (fitting square pegs in round holes)
- Poor reporting and management of scheme
- Increased cost in administration of scheme
- Lack of understanding on the pension regulators principles of good governance
- Lack of engagement from employees for a big value spend by employers.
The amount you and your staff member pay into your pension scheme may vary depending on which pension scheme you choose. However, by law, you and your staff have to pay a minimum amount into your scheme. This is set at 8% of your member of staff’s earnings. You, the employer, must pay at least 3% of this, but you can choose to pay more.
You will also need to include the following types of staff pay in your calculation: Salary, Wages, Commission, bonuses, overtime, statutory sick pay, statutory maternity pay, Ordinary or additional statutory paternity pay and Statutory adoption pay.
Avoiding common errors in workplace pension duties. According to the pension regulators investigation. The key common cause of errors
- Using incorrect earnings thresholds
- Errors in communications to staff about automatic enrolment
- Miscalculating contributions for staff receiving maternity pay
There are also other issues such as failure in ongoing duties and your reporting requirements. This is led to the pension regulators using its various powers to ensure employers comply with the law.
Compliance and enforcement bulletin July to December 2022 | The Pensions Regulator
We understand this might be daunting – but we’re here to help you. please contact one of our corporate consultant for support
