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Automatic Enrolment Pensions : Not req, yet I still need to set it up ? ! ?

Discussion in 'Employment & HR' started by Justin Smith, Dec 21, 2016.

  1. Justin Smith

    Justin Smith UKBF Regular Free Member

    Posts: 299 Likes: 24
    I`m a little bit peeved about these new Automatic Enrolment Pensions.....

    My three staff are on a Stakeholder Pension scheme (which is not compliant with the new scheme) set up when the last Government tried to do something about the pensions timebomb. Basically I put £50 a month in for each of them, though they`re not bothered about putting anything in themselves. Under these new pensions arrangements they must put something in, and it`s also impossible for me to put the same flat rate each month. Thus they`ve decided they don`t want to swap. Great, I thought, simpler and also less work for me ! But it isn`t, because, if I understand it correctly, I have to actually start up the pension schemes for all three of them, then wait for them to get the welcome pack, then they have to withdraw themselves. I can see loads of opportunities for problems there, for instance, what happens if they don`t manage to withdraw from the new scheme before the first DD goes through ? ! ? Plus it`s a load of totally pointless work for me.......

    Have I got all this right ?
     
    Posted: Dec 21, 2016 By: Justin Smith Member since: Jun 6, 2012
    #1
  2. Newchodge

    Newchodge UKBF Big Shot Free Member

    Posts: 5,680 Likes: 1,436
    Yes. It is designed to prevent unscruplous employers from stating, erroneously, that none of their staff want to join the pension scheme when, actually, none has been given the opportunity. It is also designed to reduce the need for pension credit being paid by the government when people don't have enough pension to live on.
     
    Posted: Dec 21, 2016 By: Newchodge Member since: Nov 8, 2012
    #2
  3. SteLacca

    SteLacca UKBF Regular Free Member

    Posts: 253 Likes: 51
    Not wishing to contradict Newchodge, but AE isn't "designed" at all. It's been thrown together in a hotchpotch manner that creates additional compliance responsibilities for employers for no reward, but a threat of significant penalties for failure. It can also put employees who do not want to join the pension scheme, possibly for financial reasons because they are already living hand to mouth, into financial difficulty for a month simply because they have to pay it first in order to get out and get their "contribution" back the following month.

    Sorry. I think AE is one of the most ill-conceived reforms that Gvt has introduced.

    ....Rant over.
     
    Posted: Dec 22, 2016 By: SteLacca Member since: Jun 16, 2016
    #3
  4. andygambles

    andygambles UKBF Ace Full Member - Verified Business

    Posts: 2,556 Likes: 663
    If the employee opts-opt within a certain period (3 months rings a bell) then all payments are refunded.

    You also have to keep the evidence they opted out forever. You also have to re-enroll them every x years (again 3 rings a bell). This is to stop them in 30 years saying "where is my pension?"

    One of the better options I have seen (but has a small cost associated) is the FSB Pension Scheme which does all the hard work of managing auto-enrollment and opt-outs or you.

    You can do it yourself via NEST but we have found it a nightmare so far. Getting past the security questions just crazy.
     
    Posted: Dec 22, 2016 By: andygambles Member since: Jun 17, 2009
    #4
  5. Justin Smith

    Justin Smith UKBF Regular Free Member

    Posts: 299 Likes: 24
    OMG.....
    I`d not looked into it too far because I knew all off my employees would be opting out, but I`ve just started examining all the bumph they`ve sent me and all the online forms I have to fill in for the Automatic Enrolment pensions. And my eyes are just glazing over. It`s obviously even more frustrating for me because I know it`s all a complete waste of time. I do wonder whether this "do everything online" has gone just a bit too far with this one. Surely if the Government want to set up such a complicated system they should come out and show you how to do it ! Just saying "look online" is the biggest cop out, both for governments and private businesses, it might save them loads of time / money, but they just transfer all that onto the customer !
     
    Posted: Dec 23, 2016 By: Justin Smith Member since: Jun 6, 2012
    #5
  6. Newchodge

    Newchodge UKBF Big Shot Free Member

    Posts: 5,680 Likes: 1,436
    Interesting use of language, part of the way the government fools people.

    You are not a customer of HMRC, whatever they say. A customer is someone who supports your business by buying your product, and who you want to ensure is as happy as possible with the goods/service you provide.

    Your relationship with HMRC is the direct antithesis of a business:customer relationship.
     
    Posted: Dec 24, 2016 By: Newchodge Member since: Nov 8, 2012
    #6
  7. BustersDogs

    BustersDogs UKBF Ace Free Member

    Posts: 1,144 Likes: 212
    I only have one staff member at the moment, who isn't entitled to auto-enrollment, but he can ask to join. Apparently I'm not allowed to ask him if he's intending to ask to join or not? And I still have to set one up anyway, even if he doesn't want to join. It's one of the reasons I didn't replace 3 of my staff when they resigned this year, rethinking my business model!
     
    Posted: Dec 24, 2016 By: BustersDogs Member since: Jun 7, 2011
    #7
  8. Newchodge

    Newchodge UKBF Big Shot Free Member

    Posts: 5,680 Likes: 1,436
    Why do you think you have to set up a scheme if you have no one eligible for auto enrolment? My understanding is you must set up a scheme if you have eligible staff, and if you have a scheme you must ask those who don't qualify if they want to join.
     
    Posted: Dec 24, 2016 By: Newchodge Member since: Nov 8, 2012
    #8
  9. nelioneil

    nelioneil UKBF Regular Full Member

    Posts: 402 Likes: 56
    Exactly. I will add if you dont have anyone eligible, they must still inform the pension regulator.
     
    Posted: Dec 24, 2016 By: nelioneil Member since: Jan 22, 2013
    #9
  10. BustersDogs

    BustersDogs UKBF Ace Free Member

    Posts: 1,144 Likes: 212
    The information I read implied I needed to have a pension by my staging date, so if my employee wants to enroll at that time he can immediately. I was under the impression I wasn't allowed to ask him in advance if he wanted to enroll or not. I can't remember where I saw that.
     
    Posted: Dec 24, 2016 By: BustersDogs Member since: Jun 7, 2011
    #10
  11. BustersDogs

    BustersDogs UKBF Ace Free Member

    Posts: 1,144 Likes: 212
    I think it was that he has the right to join at any time after my staging date so I must have one ready.

    He'll be 60 6 months after my staging date, although although I'm not planning to let him go if he wants to stay, he's told me he'll be reviewing if he wants to carry on working the same hours or even at all at that time. So I am assuming he won't want to join a pension for what could be only 6 months of contributions, but I might be wrong.
     
    Posted: Dec 24, 2016 By: BustersDogs Member since: Jun 7, 2011
    #11
  12. patientlady

    patientlady UKBF Ace Free Member

    Posts: 1,379 Likes: 266
    I was speaking to an IFA last week, just chatting. He said that generally any pension schemes that have been set up over 5 years ago, are worth re looking at. They have moved on...
    The workplace pension scheme is worth spending some time looking into. I have myself. As a suggestion invest 45 minutes of your time on a Federation of small business Webinar. It is free of charge. It will explain everything in plain English.
    https://www.fsbpensionservices.co.uk/webinars/
    @FSBworkpensions
    If you would like any further info I can PM you a simple FSB guide p/l
     
    Posted: Dec 24, 2016 By: patientlady Member since: Aug 25, 2009
    #12
  13. Newchodge

    Newchodge UKBF Big Shot Free Member

    Posts: 5,680 Likes: 1,436
    You only need a pension scheme if you have someone eligible for auto-enrolment. If you don't you just have to declare that you don't.
     
    Posted: Dec 24, 2016 By: Newchodge Member since: Nov 8, 2012
    #13
  14. Clinton

    Clinton UKBF Ace Full Member

    Posts: 1,887 Likes: 589
    Tell them you won't look online. Put your foot down.

    No, I'm not kidding. On a similar matter when the rest of the UK just complied and followed "instructions", whining and moaning all the way, I took HMRC on, insisted I wouldn't play the game the way they devised it and told them to get stuffed. After a long struggle, and them quoting all the latest legislation to me, eventually HMRC backed down and I'm now probably their only exception in the UK (in this matter) - they deal with me differently to how they deal with everyone else. I won't say too much here, but can talk by PM if anyone is interested in knowing more.

    The average guy / gal on the street takes too much of nonsense from HMRC because they think they have no choice. It's not easy fighting HMRC, but it's not impossible and sometimes it just needs to be done.

    I feel your pain.
     
    Posted: Dec 24, 2016 By: Clinton Member since: Jan 17, 2010
    #14
  15. Justin Smith

    Justin Smith UKBF Regular Free Member

    Posts: 299 Likes: 24
    Could someone explain something to me ?
    If the Government, quite sensibly, wants to encourage, even gently force, people to take out additional pension provision, why can`t they just do it themselves ? Wasn`t SERPS (State Earnings Related Pension Scheme) basically that ? So why did they scrap it ? And why didn`t they replace it with something else run by the Government, as opposed to forcing all this on us employers ?
     
    Posted: Dec 28, 2016 By: Justin Smith Member since: Jun 6, 2012
    #15
  16. Newchodge

    Newchodge UKBF Big Shot Free Member

    Posts: 5,680 Likes: 1,436
    The whole point of a conservative government is to remove government control and activity from as many areas as possible, and do it all through commercial interests.
     
    Posted: Dec 28, 2016 By: Newchodge Member since: Nov 8, 2012
    #16
  17. Bushman

    Bushman UKBF Contributor Free Member

    Posts: 44 Likes: 11
    So that the Government can con the public by claiming not to be putting taxes/NI up. Instead they force the burden onto businesses making it look like it's the business stopping money from their wages and not the Government increasing taxes. It always looks good in election manifesto's if the party can promise not to put taxes up.
     
    Posted: Dec 28, 2016 By: Bushman Member since: Nov 17, 2015
    #17
  18. Justin Smith

    Justin Smith UKBF Regular Free Member

    Posts: 299 Likes: 24
    Exactly.......
     
    Posted: Dec 30, 2016 By: Justin Smith Member since: Jun 6, 2012
    #18
  19. Justin Smith

    Justin Smith UKBF Regular Free Member

    Posts: 299 Likes: 24
    Could someone explain something to me ?
    If the Government, quite sensibly, wants to encourage, even gently force, people to take out additional pension provision, why can`t they just do it themselves ? Wasn`t SERPS (State Earnings Related Pension Scheme) basically that ? So why did they scrap it ? And why didn`t they replace it with something else run by the Government, as opposed to forcing all this on us employers ?


    Sorry, is that the same thing as making employers do a job that would be better done through the state ? I thought that the whole point of a Conservative government was to make it easy for business to make money, and thus increase the tax take through an expanding economy ? Forcing employers to waste a load of time and expense on something which should be done by the government (and in my case is a complete waste of time) is the opposite of that. I think Bushman (post above) has probably got this right......
     
    Posted: Dec 30, 2016 By: Justin Smith Member since: Jun 6, 2012
    #19
  20. Newchodge

    Newchodge UKBF Big Shot Free Member

    Posts: 5,680 Likes: 1,436
    Sorry, is that the same thing as making employers do a job that would be better done through the state ? I thought that the whole point of a Conservative government was to make it easy for business to make money, and thus increase the tax take through an expanding economy ? Forcing employers to waste a load of time and expense on something which should be done by the government (and in my case is a complete waste of time) is the opposite of that. I think Bushman (post above) has probably got this right......[/QUOTE]

    If the government wanted to make it easy for business to make money they would not have had years of policies that result in the top 1% becoming immeasurably wealthier and the bottom 30% becoming poorer. The more wealth the wealthy have the less is available in the economy. Give a billionaire £1,000,000 and they will stash it away in an offshore account. Give 1,000 poor people £1,000 and they will spend it in the economy.
     
    Posted: Dec 30, 2016 By: Newchodge Member since: Nov 8, 2012
    #20