Is your existing pension scheme suitable for auto enrolment?
"I already have existing pension arrangements in place for most of my staff, I’m sorted thanks!" If this is the response that you would provide if you were asked the above question then you definitely need to read on.By Taylor Patterson.
Don’t assume that your existing scheme or personal arrangements are suitable for your workplace pensions duties as an employer.Many employers have had pension schemes in place for some or all of their workforce for many years and think that the new auto enrolment legislation won’t impact on them.
Potentially this may be the case but if these are individual pension arrangements then they will have to be certified every 12 or 18 months by the employer to be a qualifying workplace pension scheme. If these certificates are not kept up to date the regulator may issue a fine.Having an existing pension scheme in place currently, you may also assume the pension provider is able to allow their individual pension to be certified in this way. It has become apparent, that some insurance companies, for example do not permit their personal pensions to be certified as a qualifying workplace pension scheme.
If you have an existing group scheme then you should check first with your provider to see if they are willing to allow the scheme to be used for automatically enrolling staff into the scheme. Just because you have a scheme with them doesn’t mean they are obliged to accept the remainder of your workforce into this scheme. You may have to find an additional pension provider to fulfill the duties to your workforce under this new legislation.This is not like stakeholder pensions and if employers do not put a qualifying scheme in place and confirm this to the pensions regulator they may face a financial penalty. This penalty may be far greater than the cost of seeking professional financial advice in the first place to establish a qualifying workplace pension scheme. Taylor Patterson’s dedicated employee benefits team can support employers who are looking to implement a fully compliant solution for their business. These services can be tailored to each employers own requirements.