Auto Enrolment FAQ’s

  1. Is there any way around the need to comply with all the employer duties?

As an employer, you must comply with all of your duties. The Pensions Regulator will be auditing all companies to make sure they are fulfilling their duties and there are substantial fines that may be levied against those that do not comply.

  1. Do I still have to comply with the employer responsibilities if I have an existing pension plan?

Yes. You still have employer duties even if you have a pension scheme that meets the minimum requirements.

  1. What penalties will I face if I don’t comply?

The Pensions Regulator will check employers are complying with the new rules. If you are found to be in breach of any of your responsibilities, you will be issued with a notice of enforcement. You will have the right to challenge that notice, but according to the outcome of the investigation, a penalty may apply.

Fines can be levied where companies have:

  • Failed to register with the Regulator.
  • Coerced their employees to opt out.
  • Failed to meet monthly contributions.

The values are shown in this table:

  1. When would an employer use postponement?

As an employer, you have the right to postpone the enrolment of your employees for three months after an employee has commenced employment. This can reduce your costs significantly and there may be other benefits too. You may want to use the postponement facility for administrative reasons. For example, you may:

  • Prefer to align the enrolment of employees with the payroll process, or avoid paying a part-month of contributions.
  1. Is salary exchange permitted to meet the minimum contribution levels?

Yes. Salary exchange is where an employee can give up part of their salary or bonus to their pension fund, resulting in their gross salary being reduced and the employee paying less tax and National Insurance. As an employer, you will make savings on your National Insurance bill, which you can then use to reduce your costs

  1. Will NEST fulfil my employer duties?

Not fully. NEST is a pension scheme into which pension contributions from auto-enrolment can be paid and invested. However, there are employer administration responsibilities that must be carried out that NEST will not undertake on your behalf.

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