Applies to all employees over 22 years old. If they earn over £833 a month they are an eligible worker and must be enrolled in a pension scheme. You also need to give the employee a letter saying this has been done and that they can opt out if they choose. The pension co will advise the employee how to do that. Any contributions already made will be refunded, if they have opted out within the timescale provided by the pension co, (usually a month) but they can also opt out any time after that by notifying the pension co. They will have to be automatically enrolled again every 3 years.
If under that amount they are an entitled worker and do not need to go in a pension scheme but they must be sent a letter from the employer giving them an option to join. You also need to do a declaration of compliance within 3 months of having an employee, whether or not they they join. The employee can also opt in at any time during their employment. If the salary is below £511.33 a month they don't need to be notified, but can join the pension scheme if they wish, but no employer contribution need to be made.
Both Moneysoft and Brightpay have AE functionality and I would recommend one of them to do the payroll. My preference is for Moneysoft but they're both good. All the letters that need to be sent are on there as well.
Something for consideration and is what I suggest to my clients. The employer can choose to postone AE for up to 3 months but they must send the employee a letter stating this and that they can choose to opt in during that 3 months. Postponement give the employer breathing space whilst the new employee settles into their job.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi John
To clarify, if there are only entitled workers who don't opt in immediately, there is no need to set up a pension? Until they opt in, if they ever do.
I have heard that nest is free to set up. But that I cannot recommend them, as such. Is that correct?
Thanks for your help. Sorry for the extra questions.
Please feel free to ask as many questions as you need to.
I wouldn't set up a pension scheme until the employee decides to opt in, but if they do it has to be set up immediately. Once your client has a paye scheme, TPR will get in touch and request compliance. All details will be on the letter they send.
TPR say you can recommend a scheme, but personally I don't. I just say I have Nest and Smart Pensions set up (both free to the employer) but you must decide your own pension scheme. Invariably they will say yeah fine, I'll have one of them
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
