The Workplace Pensions Reforms made it a legal requirement for all employers, of all sizes, to automatically enrol their employees into a workplace pension scheme.
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Whilst the effect of pensions on cash flow may have been considered by many employers, the operational impact of the legal obligations, particularly with regards to payroll procedures and communication processes, may not be fully appreciated and includes the following.
- Automatic Enrolment: Employers must automatically enrol employees into a workplace pension scheme.
- Communication: Employers are required to provide written information to employees about the automatic enrolment process, including details about the pension scheme and their rights.
- Contribution Management: Employers must deduct contributions from employees’ earnings and make employer contributions into the pension scheme on behalf of eligible employees.
- Eligibility Assessment: Employers need to assess employee eligibility for auto-enrolment based on age and earnings criteria.
- Record-Keeping: Employers must maintain accurate records of auto-enrolment, contributions, and opt-outs/opt-ins.
- Re-Enrolment: Employers must re-enrol eligible employees who have previously opted out of the pension scheme at certain intervals.
- Compliance and Reporting: Employers must comply with reporting requirements, including providing information to the pension regulator and ensuring compliance with auto-enrolment regulations.
- Opt-Out and Opt-In Management: Employers must process employees’ requests to opt out or opt back into the pension scheme within the required timeframes.
It’s important to note that this is a brief summary, and you can find a detailed summary of employer duties and compliance requirements under the navigation section.
