Part of setting up a business is making sure you stay on the right side of the law. In the UK providing a pension plan is a must, even for a small business with 1 employee. This may change depending on the country you are based in but the basics surrounding auto enrolment will stay the same. Keep reading for more pension advice Bournemouth.
What’s auto enrolment?
It’s basically a pension scheme which is applied in the workplace. The employer sets it up for his employees to take part in. Failure to comply with this government initiative will mean a penalty or a fine.
Here are some tips to setting one up...
1) Find out if you have to
The auto enrolment pension scheme isn’t a requirement for every company. The rules for this scheme are different depending on the type of business you have. However, if you are one of the following types of business you won’t have to;
- Sole trader
- Self employed
- A limited company which has one director
- If you have a limited company with you civil partner or spouse. This will change if you both have an employment contract.
Simply, if you employ staff you need to set up an auto enrolment pension plan. There is a lot more to this matter though. If you want to understand the complexities of this issue, contact a professional and ask for pension advice Bournemouth.
2) Work out who is eligible
To put it simply, every one of your workers is.
- If they meet the state pension age requirements, and are as young as 22, you have to enroll them.
- If they are younger, or earn a set amount of money, they can ask to be enrolled in the scheme.
3) Understand your responsibilities
To ensure that your company is ready you need to;
- Register a pension scheme that is suitable for auto enrolment
- Give your employees a written letter which outlines the pension rules
- Assess the employees eligibility at the time of every payment
- Register your company with the ‘Pension Regulator’
- Make sure that you contribute to the pension pot regularly
- Maintain records that prove you have fulfilled all of your responsibilities
4) Work out all the nitty gritty details.
- You need to meet the staging date i.e. the deadline by which you have to enrol your employees in the pension scheme.
- You need to choose your workplace pension scheme
In this step you will need to enlist the help of your financial advisor. It’s only applicable if you aren’t using an existing scheme. Just remember to choose carefully, and after obtaining all the facts. A pension plan can have a number of ramifications on your business. So, seek some pension advice Bournemouth from a professional before you sign the dotted line!
In the end, setting up a pension scheme isn’t hard. It just requires careful footing.
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