To ensure your pension scheme is in place by your staging date, the key things you need to be aware of are:
Staging Date
Every employer will have to be prepared for their individual staging date. This is where the charity’s automatic enrolment duties will come into effect. Those who fail to comply will face excessive fines of up to £500 a day, depending on the number of employees. Charities with 30-49 employees will need to implement a workforce pension scheme by 1 October 2015; those with no more than 30 employees will need to do so between 1 January 2016 and 1 April 2017. To find out your exact staging date using your PAYE reference, click here.
Key Criteria
Individuals have the right to opt out of automatic enrolment, although, employers have to enrol employees who:
- Earn more than £10,000 a year
- Are between the ages of 22 and 65 (National State Pension Age)
- Work in the UK
Gross Monthly Earnings | Age of Employee | Age of Employee | Age of Employee | Gross Weekly Earnings |
---|---|---|---|---|
16 - 21 | 22 to State Pension Age | State Pension Age to 74 | ||
£486 or less | Can join a Pension Scheme | Can join a Pension Scheme | Can join a Pension Scheme | £112 or less |
Between £486 and £833 | Can request to be Opted In | Can request to be Opted In | Can request to be Opted In | Between £112 and £192 |
£834 or more | Can request to be Opted In | Must be Auto-Enroled | Can request to be Opted In | £193 or more |
According to The Charity commission, in 2014, over 740 charities with an annual income of £500,000 saw a deficit in their accounts due to the automatic enrolment legislation. 97% of these charities reported a combined pension scheme deficit of over £617m. With some of the largest charities experiencing high deficits from the introduction of the automatic enrolment scheme, smaller charities are more likely to find the changes to the legislation a threat to their growth. All charities have to contribute 3% for every employer eligible. Therefore, it is important that all charities seek advice and carry out extensive budgeting and planning when reviewing their current pension scheme and introducing an efficient scheme in place.The recommended date that charities should begin to plan for their staging date is a year in advance. If you require more information, or assistance of your charities auto-enrolment process, please contact Suda Ratnam at suda@raffingers-stuart.co.uk.
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