For many of our clients, 2017 represents the year in which they will be required to register for auto enrolment pensions.


Unfortunately, for small businesses this process usually involves an excessive amount of bureaucratic filing and administration.  From your staging date (which can be found here) you are expected to enrol all eligible staff members in a pension scheme.


Unfortunately this enrolment must take place initially whether your staff will wish to make use of the scheme or not.  If not, the duty is on the staff member themselves to declare to the pension provider that they wish to withdraw from the scheme.

Once the employer has enrolled their staff they must issue letters with key information on the staff members’ rights and obligations under the new pension rules.  This will also set out the rates at which pension contributions will be made by both the employee and the employer.  The minimums are as follows:


  Employer contribution Employee contribution Tax relief
From enrolment 1% 1% 0.2%
From April 2018 2% 3% 0.6%
From April 2019 3% 5% 1%


Once these letters are issued, the employer must then enroll all eligible employees into a pension scheme.  Our personal recommendation is the NEST scheme, a free government controlled provider, which we believe is a far superior alternative for small businesses to the extremely expensive private providers seeking to capitalize on the mandatory nature of auto-enrolment.


Of course, once a business has carried out all of these duties, their obligations do not end.  Auto-enrolment is an ongoing process, every time a new employee enters the business employers are obligated to assess their eligibility for pensions and enrol them in their scheme if necessary.


The one slight relief to this is that for businesses with a single owner employee, the only obligation that need be performed is a declaration must be filed with the pensions regulator explaining that the business does not have any employees to whom auto-enrolment applies.  Of course, if they later take on employees, they’re placed back at square one.


Any clients concerned about the obligations placed on them by these new rules should feel free to contact us to discuss it.  For our part we carry out all of the above filing obligations to ensure that the burden of complying with these time consuming new rules does not fall on our clients.