How to stay compliant with workplace pensions

Blogs 25 Oct 2022

From employer contributions to communication, our experts from FSB Payroll and Pensions share their top tips for keeping your small business' workplace pension scheme compliant.

A version of this resource was first published in September 2020.

As an employer, it’s your responsibility to ensure a compliant workplace pension is in place for all eligible employees. Even if you only employ one person, you’re still responsible for making sure that they have a pension scheme set up and that you carry out your duties.  Failure to do so can result in fines, so it pays to stay up-to-date.

Be proactive about pensions with top tips for compliance from experts at the Federation of Small Businesses. 

How can I stay compliant with pensions?

1. Stay organised

With your paperwork in check, you’ll be able to stay ahead of the curve with deadlines and know what you need to do and when. Keep all your important letters and documentation in order, so you know where everything is.

That way, when you need a reference number, records of opt-out requests or information for your automatic enrolment duties, it’s all in one place.

2. Save the date

Your re-enrolment date is an important date for your diary to ensure you complete all your duties accurately and on time.

If you’re unsure when your duties start date is, it can be found on a letter from The Pensions Regulator, or you can enter your PAYE reference number and letter code here to find out.

3. Know your duties

Pensions aren’t a one-and-done thing – you have ongoing duties to be aware of. You should provide an approved workplace pension scheme for eligible employees and offer it to all other employees.

You’re not allowed to stop an employee from enrolling in the pension scheme, nor can you force an employee to opt out.

4. Assess your workers

Review your workforce at every pay period, take appropriate action if needed and keep full records to make sure all eligible employees are enrolled.

If your employee is aged between 22 and state pension age and earns over £10,000 per year (£833 per month or £192 per week), you need to put them in your pension scheme and write to them within six weeks from the day they meet the criteria.

For example, if someone has increased their contracted hours, you may need to auto enrol them.

Puzzled by payroll and pensions?

Learn the basics of setting up and managing a compliant payroll and workplace pension scheme for your small business, from adding your first employee to payroll to completing your triennial review.

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5. Communicate

Keep your staff in the loop with any changes to their pension scheme. If a new employee starts working for you, or an existing member of staff becomes eligible, then you’ll need to auto enrol them and make them aware of this.

Ensure your contact details are updated regularly so that The Pensions Regulator can get in touch if they need to. If your pension scheme is dealt with by someone else, such as FSB Workplace Pensions and Payroll, then make sure their contact details are provided too.

6. Contributions

It’s not just employees who pay into their pension pots – employers must make contributions too, and it’s important to stay on top of this. You should have systems in place to ensure contributions are paid accurately and on time.

The minimum contribution from employers is 3%, with your employee paying 5% to meet the 8% total.

7. Re-enrolment

Every three years you must put eligible employees who have opted out of the pension scheme back into it as part of your re-enrolment duties. This is known as a triennial review.

As part of this, you should fill out a re-declaration of compliance which lets The Pensions Regulator know you have met your duties.

8. Don’t ignore it

It’s a legal obligation to remain compliant, or you risk facing fines. “If you feel you are in a non-compliant state, it's worth seeking advice on how you can put things right,” says Sam Baker from FSB Payroll and Pensions.

If you need assistance with compliance, our team offers a rescue service that can provide support and help you to avoid fines, or minimise them where possible.

Puzzled by pensions?

Pensions can be confusing, but it’s a legal requirement that you can’t afford to get wrong. Spend less time on paperwork and more time running your business.

Stay in control of payroll and pensions

FSB Payroll and Pensions is more than just software. Access comprehensive support for small employers including a discounted payroll service and tailored workplace pensions packages.

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