Ongoing Pension Auto-Enrolment Duties
Posted on 16th September 2021
Auto-enrolment is a continuous responsibility – and there are many duties you still need to ensure you’re carrying out as time goes on.
Keeping records up to date
You are legally required to keep all employee records up to date, and these records must be kept for a minimum of six years, including ex-employees.
Deductions and contributions
You must ensure, as an employer, that you are making the correct employee deductions and employer contributions in accordance with legislation – currently 8% total minimum contributions with employer contributions being set at a minimum of 3% – and your pension scheme. It is your responsibility to keep up to date with changes in legislation, so ensure you are not caught out!
Opt-out and opt-in requests
Your employees are entitled to opt in and out of the pension scheme and receive a full refund on any contributions they have made, as long as they do so within a specific ‘opt-out period’. If they choose to leave the scheme after this period, then they will be obliged to do this in accordance with the scheme rules.
If non-eligible workers choose to opt-in to the pension scheme, they can do so, and minimum pension contributions will apply to them in the same way that they apply to eligible workers. Similarly, entitled workers may opt-in, but they would be making employee contributions only – unless you choose to make employer contributions too (though this is not a legal obligation).
Monitoring all employees old and new
You must ensure that you are continuously monitoring all employees – not just new ones – to ensure their worker category (see page 8) is up to date. If any of your employees change category for any reason, you must write to them in the same manner as you did when you first assessed them to inform them of this change and how it affects their pension contributions.
Contribution files must be submitted to your pension scheme provider after each pay period, whether that’s each week, fortnight or month. From these files, the pension provider can view information about all employees, and see a breakdown of all the contributions currently being made.
You are legally obliged to re-enrol any employees who opt-out of the pension scheme every three years. Of course, they may request to opt-out again – but this doesn’t matter. You also need to complete a declaration of compliance each time you re-enrol an employee, no matter whether you think they will opt-out again. Luckily for employers, payroll software is becoming more and more auto-enrolment friendly and is making it easier for employers to automate their processes.
At Effective Accounting, we support our clients with these duties – get in touch to find out more.
Nicola J O'Sullivan -
Founder | Xero Champion | IR35 Expert
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