PRIVATE DENTISTRY MARCH 2016

What do I have to do?Each employer will now be obliged to offer a workplace pension for eligible employees and make contributions to the scheme on their behalf. Each employer has been given a ‘staging date, for which they must have an auto-enrolment scheme set-up. You must prepare for this well in advance to make sure you do not suffer a fine or sanction from The Pensions Regulator.

There are 33 mandatory tasks involved in complying with auto enrolment and it has been calculated that this can take up to 103 working days. Your key

responsibilities include: • Assessing your employees every pay period• Communicating with your employees• Automatically enrolling every employee that

is eligible• Re-enrolling eligible employees that opt out every

three years• Providing a Qualifying Workplace Pension Scheme;

that is, one that complies with specific government criteria

• Providing a Declaration of Compliance to The Pensions Regulator (both within five months of

Adam Brookbanks, of Simple Pensions - the new in-house team from Frank Taylor & Associates - answers the most commonly asked questions on workplace pensions

Q+A : WORKPLACE PENSIONS

BUSINESS & FINANCE

the staging date but also every three years at your re-enrolment date)

• Paying contributions• Maintaining an audit trail• Safeguarding employees by ensuring they are not

coerced into opting out of the scheme.Of course most employers do not have the time

to take on this additional workload and familiarise themselves with the 500 pages of guidance material. Therefore most employers will obtain advice and support in setting up and administering a compliant auto-enrolment scheme.

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Written by Adam Brookbanks

PRIVATE DENTISTRY MARCH 2016

BUSINESS & FINANCE

ADAM BROOKBANKSis technical director for Simple Pensions. Adam is a Level 4 Qualified Independent Financial Adviser and has worked in the dental and pharmaceutical financial services sector for the past five years. Adam has provided advice on all areas of financial planning including pensions, investments and tax planning and now works with Simple Pensions on the

implementation and analysis of its auto-enrolment solutions.

Simple Pensions are able to assess your company and employees and provide a free quotation on the most suitable auto-enrolment solution. The scheme can be set-up by us on your behalf and our ongoing support will help you administer the scheme. Choosing Simple Pensions Ltd as your auto-enrolment support will mean you can concentrate on running your own business profitably.

Shouldn’t my accountant/payroll be doing this?Accountants and payroll bureaus are not qualified pension advisers, an accountant may point you in the direction of an endorsed scheme but they still cannot advise or comment on why the specific scheme is best for you and your employees.

The majority of accountants/payroll bureaus will not assist you with issuing statutory communications on an initial or ongoing basis. They will simply upload data which is about 10% of the overall work involved.

Is the Government offering any help?The government have provided guidance and literature and have endorsed NEST. There are a few features of NEST which mean that it may not be suitable for your business.

The National Employment Savings Trust (NEST) is a government endorsed scheme, not a government scheme. NEST does not have automated communications, meaning you would have to do all of your own administration or pay someone to do it for you. There is a 1.8% levy on each employee contribution. You are not currently able to move the funds away from NEST in future and income options available in retirement may be restrictive, this may put your employees at a serious disadvantage.

When is the deadline?Your staging date can be at any time up until October 2018 with most dental practices having a staging date within the next 18 months. You will be sent a reminder 12 months before your staging date is due. You should prepare and set-up a scheme as early as possible to make sure implementation costs stay low. We have experienced the cost of auto-enrolment schemes increase constantly in the past 18 months and if you continue to wait you will pay more.

Is it going to be expensive?If you work with Simple Pensions to set-up a compliant auto-enrolment pension now then it will not be expensive to do. Costs are an allowable company expense and we have a competitive charging structure to make sure you stay cost-efficient

throughout the process. The charges will depend on your company size, number of payrolls and which scheme is set-up.

Contact Simple Pensions today for a free quote and we will detail a proposal for you.

How much do I need to give my employees?You are obliged to provide the a minimum contribution for your employees, as shown in Table 1.

The percentage contributions are based on ‘qualifying earnings’ - between £5,824 and £42,385 per year, or the equivalent for the relevant pay period. Simple Pensions will help you to establish the correct contribution’s for each employee.

What happens if I don’t do anything?Auto enrolment is compulsory and The Pensions Regulator can issue fines and other sanctions to employers who do not comply. These fines start at a £400 fixed penalty notice and can then be as high as £500 per day. The Pensions Regulator can also compel employers to cover employee contributions and issue criminal charges against the directors for wilful non-compliance. It is essential that you plan for this and ensure you comply in time.

Who needs to be included?Your employees will be categorised as follows:

Eligible job holders - are aged 22 – State pension age (SPA) and earning above £10,000pa. Must be

COMMENTS TO PRIVATE DENTISTRY@ThePDmag

auto-enrolled with employer contributionsNon-eligible job holders - are aged 16-21 or SPA-74

and earning above £10,000), or - aged 16-74 and earning between £5,824 and £10,000. Have the right to opt-in with employer contributions.

You may also have Entitled Workers who are aged between 16 and 74 earning £5,824 or less. These employees will have the opportunity to opt-in to the scheme but you will not be obliged to pay employer contributions.

What happens when members of staff leave or join?For members of staff who leave we can help you to remove the auto-enrolment responsibilities with the scheme provider and your payroll, which will include some administrative procedure. The staff member will retain the pension fund once they leave but you will simply not need to make further contributions. They should have the opportunity to transfer the fund away to a personal pension or to their new auto-enrolment scheme if desired.

Simple Pensions can also help with your responsibility to enrol new members of staff to the scheme and the administrative procedures which are required. Our ongoing service will help the auto-enrolment scheme continually run in harmony with your company and payroll.

How do I start?Contact Simple Pensions today and we will have a 10-minute initial conversation with you to establish your requirements; within 48 hours we will send you a free comprehensive proposal.

Table1: Pension contributions

Date Minimum employer contribution Minimum total contribution

To October 2017 1% 2%

To October 2018 2% 5%

October 2018 on 3% 8%

‘ACCOUNTANTS AND PAYROLL BUREAUS

ARE NOT QUALIFIED PENSION ADVISERS,

AN ACCOUNTANT MAY POINT YOU IN THE DIRECTION OF AN

ENDORSED SCHEME BUT THEY STILL

CANNOT ADVISE OR COMMENT ON WHY

THE SPECIFIC SCHEME IS BEST FOR YOU AND

YOUR EMPLOYEES’

SIMPLE PENSIONSIs the new in-house team of experts at Frank Taylor & Associates, offering a workplace pensions solution to

ensure its dentist clients get the best advice to be able to comply with this legislation.

TELEPHONE: 0330 088 11 56EMAIL: getstarted@simplepensions.com

WEBSITE: www.simple-pensions.com

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