Have you missed your staging date?
Don't panic! We can help.
If you have missed your staging date/duties start date, don't worry, you are not alone, we've helped lots of people like you. The checklist below will help you get compliant.
1 - Find out what your staging date/duties start date is.
First of all, you need to check what your staging date is. You should have received a letter from the Pensions Regulator with the staging date for your business on it. If you don't have that letter you can look up your date by typing in your PAYE reference into our staging date look up in the Smart Pension account. Find out more about your staging date here. For new employers who hire staff for the first time on or after 1st October 2017, your duties start date is the date that your first member of staff starts work and is the date that your legal auto enrolment duties begin.
Look up your Staging Date
N.B. In order to do this successfully you will need the PAYE reference for your company's largest PAYE scheme. We use the Pensions Regulator's staging date service to ensure we provide you with the correct staging date for your business.
If your staging date/duties start date has passed then you need to follow the steps below.
The Pensions Regulator issue fixed penalty fines to businesses who do not meet their auto enrolment duties and missing your staging date/duties start date is one of these duties. However, they treat each case differently, the quicker you get in touch (and depending on your situation) the better positioned you will be to avoid a fine.
3 - Inform your employees.
Another employer duty is to inform your staff. We will supply you with the personalised, statutory letters you will need and even provide your employees with a member area to manage their pension and view these letters.
4 - Assess your employees.
Before you can bring your scheme up-to-date you need to assess your staff to establish if they are eligible for automatic enrolment. You can use the Smart Pension account to assess your employees or you can use your own payroll software if it supports assessment. Any eligible employees need to be enrolled and any employees who don't qualify need to be informed so they can decide if they wish to opt in. Again, we will supply you with these assessment letters and send them to your employees.
5 - Backdate any missed contributions.
In order to become compliant you will need to pay contributions for all employees who are eligible or who have opted in. Importantly, you will need to pay these contributions as of your staging date/duties start date. You will need to get in touch with the person who runs your payroll and using the previous payrolls for any missed periods, calculate any missed pension contributions.
You can do this in your payroll application, or you can use our assessment tool to do this. Once all missed pension contributions have been added to your Smart Pension account we will invest these into your workplace pension scheme.
6 - Complete your declaration of compliance.
Almost there! Before you can become officially compliant you need to complete your declaration of compliance. This is a form on the Pensions Regulator's website. We will provide you with the details you will need to complete this.
Learn more about the declaration of compliance.
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If you're still in doubt, read through our complete guide below which will go into detail, explaining what you are required to do to step by step.
Detailed guidance for companies that have missed their staging date and need to get compliant.
1. Know Your Staging Date or Duties Start Date
We know that auto enrolment isn't the easiest thing to get your head around, particularly if you are a small SME and have little or no experience in pensions. As an employer, fulfilling auto enrolment duties is compulsory, regardless of whether your employees meet the criteria specified (age 22 or over, earning above £10,000.00 a year and ordinarily works in the UK). You must be able to show The Pensions Regulator that you are offering an auto enrolment qualified workplace pension scheme to all of your employees, even if you only have one employee, by the time your staging date/duties start date arrives. Don't mistake your staging date/duties start date for the date that your declaration of compliance is due, which is five months after your staging date. This is covered in more detail below in section 7.
For those who are completely out of the loop or previously thought that it wouldn't apply to your company, your staging date was set in law back in April 2012, and this is the date that The Pensions Regulator calculated your staging date (regardless of whether that number has increased or even decreased since, or whether workers are currently eligible, non eligible or entitled). You should have received a letter from The Pensions Regulator to notify you of auto enrolment and on this letter you will find your staging date and your PAYE reference. For those of you who haven't, to find out what your staging date is, head over to our Deadlines & Staging Dates for Workplace Pensions page where we can give you an estimate of when you should be staging. This is the date by which you will have to start enrolling your employees into a qualified workplace pension scheme.
If you require further information about auto enrolment and workplace pensions, refer to our The Employers Guide to Workplace Pensions. page where you'll find everything you'll need to know. But for those that leave it too late, there is a risk of missing the staging date completely. In that particular situation, what should you do? First and foremost, you will need to get in touch with The Pensions Regulator and let them know that you have missed your staging date.
2. Select Your Pension Provider
You will need to do your research if you haven't done so already. Some companies may resort to seek advice and help from their existing accountants/financial advisors, whilst others may have an existing pension scheme and may want to enquire with the provider whether it meets the qualifying criteria for auto-enrolment, purely just for ease and convenience. If your current pension provider can confirm that it does meet all qualifying requirements, then you can contact The Pensions Regulator and they will send you through a document to sign and in this case, auto enrolment is not needed. You can also ask your pension provider what amendments could be made to the existing pension scheme in order for it to qualify for auto enrolment, and whether the pension provider would be prepared to make those changes to the existing pension plan.
At Smart Pension, we took all of the complexities and constraints on board and set out to develop a pension scheme that was easy and quick to sign and set up. Security was our priority so that we could instil confidence in our customers, as well as create an offering that was great value for employers and employees. For more information on Smart Pension, please refer to our About Smart Pension page. We also have a secure live chat messaging service where you can engage with our team of experts during office hours (which can be found at the bottom right of the screen) as well as our FAQs system where you can search for previous topics that have been discussed that might help answer your question or if you like, start a new discussion. If you don't have an existing pension provider or want a new one, you need to narrow down a list of prospective providers.
You will need to take into consideration factors such as initial upfront fees, on-going annual costs, cost to employees, time it takes to sign up and enrol employees into the pension scheme, payroll adjustments to ensure compatibility with auto enrolment, and educating employees about the new corporate legislation to name but a few.
3. Enrol Your Employees
Once you have chosen a pension provider for your workplace pension scheme, you will need to enrol your employees using their age, salary and worker status on the date they should have been originally enrolled.
4. Your Requirements Post Staging Date
Depending on when and how late you enrol your employees into a workplace pension scheme from the staging date set out or your duties start date, it will affect the steps you need to take in order to rectify the situation.
If you are within 3 months of your staging date/duties start date, you will need to process all of your payroll between your missed staging date/duties start date up to the current date, then backdate the employee pension contributions as well as deduct contributions from the employees themselves for the 3 months that should have happened. If you are enrolling after 3 months from your staging date/duties start date, then the financial burden lies solely with the employer. You will have to cover the cost of the pension contributions as well as the employee's contributions once you've processed the backdated payroll. The longer you leave it, the bigger the repercussions or in other words, financial outlay that needs to be made.
5. Ensure Your Payroll Is Compatible
Once The Pensions Regulator has been informed, you will need to take steps to ensure that your payroll is compatible with your selected pension scheme.
Payroll needs to be able to function effectively with auto enrolment in place and take into consideration factors such as level of employee contribution, those that choose to opt out, track non-eligible employees, and monitor employee salary and age and identify and enrol them automatically, if and when they are eligible to join the workplace pension scheme. Many smaller companies won't have their own payroll department and typically outsource it. If you are relying on an outsourced company, it is even more vital that you get ahead of the game as they will no doubt be helping many other companies like yourselves who are going through the auto enrolment process. The Smart Pension contribution calculator works with inputs from any payroll provider.
Our platform memorises previous payroll runs, so it's extremely easy to complete your next pay run and pension obligations by simply updating the system with your employees latest pay (or even just bulk uploading a sheet). Once the pay run is approved, payments are automatically deducted by direct debit at no cost to the employer.
6. Inform Your Employees
If you haven't done so already, it is mandatory that you inform all your employees of the pension changes that are about to take place and how it will affect them. TPR expects an employer to write to their employees within 6 weeks of their duties commencing.
They will need to know, if eligible, that they will or have been automatically enrolled into a workplace pension scheme and deductions will be made from their salary into their pension. They will also need to be informed of their right to opt out if desired, or even opt back in should they choose. All eligible employees by law must be enrolled into a qualifying workplace pension scheme but can opt out if they choose to. With Smart Pension, our platform allows you to generate employee education documents automatically (with or without your company name and logo printed on it) along the whole auto enrolment process.
Documents are sent from pre staging date/duties start date, to inform them of the upcoming changes that will affect them, to post enrolment, once your company has signed all eligible employees onto the new workplace pension. This will ensure that communication is covered in all aspects of the auto enrolment process.
7. Submit Your Declaration Of Compliance
If you haven't done so already, it is mandatory that you inform all your employees of the pension changes that are about to take place and how it will affect them.
You will need to submit a declaration of compliance declaration of compliance to The Pensions Regulator within five months of your initial staging date/duties start date. This means that even if you have used postponement, you will still need to submit your declaration five months from your original staging date/duties start date. If in doubt, check with The Pensions Regulator.
This is simply to let them know that you, as an employer, have complied in automatically enrolling all your eligible employees into a workplace pension scheme and have already made the first pension contribution. The declaration of compliance is obligatory and even if you have been authorised to postpone your auto enrolment staging date/duties start date, the date of the mandatory declaration remains the same and is due five months from the original and initial staging date/duties start date.
8. What You Need To Know About Non-Compliance And Penalties
Failure to comply with auto enrolment of eligible employees into a workplace pension will result in The Pensions Regulator taking matters into their own hands. They have a range of enforcement options that they can use in order to get employers to comply with the auto enrolment legislation that range from informal warnings, interest charged on unpaid contributions to fixed and escalated penalties depending on the number of employees you have. It is in your own interest to comply with the law as there isn't one incentive not to do so. The longer you leave it post staging date/duties start date, the bigger the repercussion, TPR has taken legal proceedings which have led to criminal prosecutions. For more information on penalties, visit our Auto Enrolment Penalties Explained page.