Auto-enrolment; your 218 employer duties


The Government estimates that millions of people in the UK are currently not saving enough for their retirement.

To help solve this problem, the Government has introduced legislation that means every employer will have a duty to put a pension scheme in place. You’ll also have to automatically enrol certain workers into the scheme and make contributions on their behalf. This presents a huge challenge for businesses. You’ll need to understand your automatic enrolment duties, the impact on your business and the changes you’ll have to make.

What it means for you?
Don’t under-estimate what’s involved. There’s a lot for you to think about:

  • Does your current pension arrangement qualify as an auto-enrolment scheme?
  • How will you communicate with your workers and ensure you get the right message across?
  • Have you considered the additional administration and cost involved in meeting the new requirements?
  • Will your existing payroll process need to be altered?
  • Will you be able to cope with the additional administration burden?
  • Will you be able to put new processes in place and comply with record keeping and reporting requirements in time?

The penalties
The penalties for not complying with the 218 employer duties are below:

  • “Wake up call” – £400 fixed penalty
  • For persistent offenders:
    1-4 workers – £50 per day
    5-49 workers – £500 per day
    50-249 workers – £2,500 per day
    250-499 workers – £5,000 per day
    500+ workers – £10,000 per day

What can we do?
We can provide you with practical help and advice every step of the way through automatic enrolment. We can work out your staging date and review any pension schemes you have in place to find out what you have to do to make it suitable for automatic enrolment. We can also review your workforce to help you understand what your new duties will be and advise you on ways to save money and offset the cost of automatic enrolment. Finally, we can design the right pension scheme for your business and your workers.

If you need help, email me or call me on 0161 236 9077. If you would like more information on auto-enrolment, including details on all 218 employer duties, please see the useful section below.

Here are some of the things you will need to do before, on and after your staging date…

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  • Assess how your workforce will be structured on your staging date to determine what duties you will have for each type of worker.
  • Choose a pension scheme for workers who will be automatically enrolled and agree how this will be set up.
  • Choose a pension scheme for workers who will be given the option to join and agree how this will be set up.
  • Engage with your payroll providers.
  • Communicate the changes to your workforce.

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  • Tell your workforce about how automatic enrolment affects them.
  • Automatically enrol certain workers into your pension scheme.
  • Invite other types of worker to join your pension scheme.

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  • You must register with TPR within 4 months of your staging date.
  • Maintain records to prove compliance with the employer duties.
  • Continue to automatically enrol certain workers into your pension scheme.
  • Run an opt in / joining process for other workers.
  • Ensure the correct contributions are deducted and paid into the pension scheme.
  • Manage opt outs, process refunds and re-enrol workers roughly every 3 years.
  • Monitor age and earnings regularly as workers can move between different categories.
  • Re-register with TPR roughly every 3 years.

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This blog post was written by Paul Lindfield, Director of Wealth Management for Manchester accountants and business advisors, Sedulo.
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