What is my staging date, and what exactly does it mean?
Your staging date is the date you must comply with the legislative requirements for auto enrolment.
Which employees will have to be enrolled?
Employees aged between 22 and state pension age and earning over £10,000 per annum (£833 in a month) must be automatically enrolled.
Other employees do not have to be automatically enrolled but you still have to make a pension scheme available to them which they can ask to join.
What are the minimum contributions?
Like with National Insurance, the minimum pension contributions are payable on a band of earnings. For 2015/16 the band of earnings which is pensionable is £5,824 - £42,385.
The minimum contributions that must be paid into the pension are increasing over the next few years. You or your employees can choose to pay more than the minimum.
Date |
Employer minimum contribution |
Employee minimum contribution |
Before 30.09.2017 |
1% |
1% |
01.10.2017-30.09.2018 |
2% |
3% |
01.10.2018 onwards |
3% |
5% |
Can employees opt out?
Yes, employees can opt out of the pension but only after you have given them their full enrolment information at your staging date. It is unlawful to provide incentives to workers to induce them to opt out or to threaten them with any consequences of not opting out.
I am a director of my company and the only employee, do I still have to apply auto enrolment?
If you only have directors and office holders (for example, a company secretary or non-executive director) then, provided any such office holder does not have an employment contract, they are not classed as a worker and therefore the business would be exempt. You will need to tell the Pensions Regulator that you are exempt and if you take on any employees in the future you will still have to apply auto enrolment.
What pension scheme?
If you already have a company pension scheme in place it may be possible to use this, RNS can contact the pension provider and review if it is compatible with auto enrolment.
If you do not currently have a pension scheme RNS can set a new one up for you. With the advent of auto enrolment a number of different pension providers have entered the market place. Our preferred pension scheme is NOW Pensions. NOW Pensions is a trust based pension scheme that has been operating in the UK since the inception of auto enrolment in 2012. Prior to this it has been managing pension investments for 50 years in Europe.
We can set up an alternative or bespoke solution but the administrative costs may be higher.
How will all this be administered?
There are two aspects to consider; the work required at your staging date, and secondly the continuous assessment that is required each month to pick up any new employees or changes in an employee’s circumstances. The pension deductions also need to be calculated each month and passed on to the pension scheme.
- If RNS provide payroll services for you then we will be able to deal with the complete process; setting up the pension scheme and assessing and enrolling your employees at staging date, and also the continuous assessment and administration of the pension scheme going forwards.
- If you do your own payroll we can still set up a new pension scheme for you and help with your assessment and enrolment at staging date. But you will need to perform the ongoing assessment and administration each month yourself as part of your payroll process. You will need to make sure your payroll software is upgraded to include auto enrolment functionality. SAGE payroll users will need to add the SAGE Pensions Module.
- Or, you can transfer the administration of your payroll to RNS. Please contact us for a quote.
How much is auto enrolment going to cost my business?
The costs depend on what solution you choose.
If you choose RNS to provide your solution we will charge an initial set up fee which depends on the number of staff you employ.
If we also provide payroll services for you there will be a small increase in your usual fee for dealing with the auto enrolment procedures each month.
We will provide a quote for your fees closer to your staging date.
NOW Pensions’ charges are low cost, between 30 pence and £1.50 per employee each month, which is paid by each member. There is no cost to the employer.