Key messages from The Pensions Regulator
27 November 2014
The Pensions Regulator has issued a helpful note of key auto enrolment messages.
1. Do you really know your staging date? The law requires all employers, including small and micros, to provide a workplace pension for certain staff. Each employer has a date by which they need to comply with the law. Our research has shown that up to 40% of micro employers have guessed and got it wrong. Don’t guess what yours is, find out by checking on the regulator’s website using our staging date tool
2.The November deadline to complete declaration of compliance approaches for thousands of medium employers. Employers have five months from their staging date to complete their declaration of compliance (registration). Thousands of medium employers (62-89 workers) who staged in July and have automatically enrolled their eligible workers need to complete this legal requirement by the end of November. Employers must submit information to the regulator about how they’ve complied with their employer duties. Those who do not do complete their declaration in time could be fined. Do not wait until your deadline to complete this. You can start to complete it now and fill in the remainder when you are ready.
3. The first employers have been issued a Fixed Penalty Notice for not meeting their duties. As we deal with smaller employers, we will see more who, despite our message to prepare early, leave it too late or do not comply at all. Willful non-compliance is not acceptable. We expect to see the number of times we need to use our powers increase.
The regulator has a range of powers to tackle non-compliance including serving fixed penalty notices and escalating daily penalties notices.
1. TPR Worker Enrolment and Assessment Tool – We encourage employers to first look at their existing payroll systems to check whether these are suitable for automatic enrolment. If not, there are a number of free or competitively-priced payroll software products that can support the smallest employers with AE. However, we are mindful that there remains a significant risk that those users of HMRC’s Basic PAYE Tool (BPT) tool, who do not choose to take up free or competitively-priced payroll software products (that could better support them with AE), would be at risk of non-compliance if they are not able to identify which workers to automatically enrol or what the minimum level of contributions would be.
Where employers do not use payroll that is suitable or do not have alternative software, then as part of our remit to educate and to enable employers to be able to meet their automatic enrolment duties, we will be making a tool available to them to assist them. This will be suitable for the very smallest employers and will allow them to know which of their employees to automatically enrol, what communications to send and what the right contributions are. The tool is expected to be available next Spring ahead of the first micro employers staging in June 2015.
The tool will not be set up to integrate with other software systems or HMRC’s BPT - and its primary output will be tailored guidance rather than data. The tool is a further addition to the suite of existing tools we have made available to both educate and enable employers to comply – for example the staging date tool, the employer duties tool and the minimum contributions tool. It is not designed as a substitute for commercial products.
We intend to invite software developers to a workshop later this year to share more detail and gather industry views. In the meeting, we will be particularly interested in how the market might more fully mitigate the risks that we are trying to manage.
2. TPR Test Data Suite – We are planning on publishing, in March 2015, a comprehensive suite of Test Data packs. This test data will be a modular series of multi-paycycle tests designed to cover a wide range of scenarios - intended to help software developers have confidence that employers who use their products can comply with the new automatic enrolment duties. The data will be produced in .pdf and .xls formats (using PAPDIS* standard data field definitions where appropriate) to make it easier for software testers to import.
* PAPDIS is the Pensions & Payroll Data Interface Standard, an industry standard designed to allow payroll and middleware software to use a common data format for payroll to pension provider communications (eg to send data on pension contributions and enrolment of new members). For further information on the PAPDIS standard see www.papdis.org