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What happens if you miss your staging date?

12th Sep 2016
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The payroll solution that provides all you need for Auto Enrolment.

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Your staging date is the date your automatic enrolment duties come into effect and you must be prepared for this date. An employer’s staging date is an important date and The Pensions Regulator recommends that you start preparation at least 6 months in advance.

The Pensions Regulator writes to employers at least 12 months before they are due to stage informing them of their staging date. This date can also be found on the Pensions Regulator's website armed with the employer PAYE number. Most payroll software, such as BrightPay, offer integration with The Pensions Regulator, which allows users to find out their staging date from within the software.

As auto enrolment begins to affect smaller employers, a question that is becoming more and more frequent is what happens if an employer misses their staging date. It is important to note that backdating your auto enrolment duties to the staging date will in itself be a nightmare, but you may also be liable to non-compliance penalties from The Pensions Regulator.

If you do realise that you missed your staging date and you are within 6 weeks of that date, the best option is to postpone auto enrolment. All employees must receive communications within 6 weeks of the staging date relating to the postponement and explaining when they will be re-assessed. If this communication is not issued then the postponement effectively never happened and enrolment must be completed retrospectively back to the staging date.

If you missed your staging date and are outside of this 6 week period, then postponement is not an option and you must backdate auto enrolment and make contributions from the staging date. If this is the case, make sure to complete the following steps:

1. Get in touch with the Pensions Regulator.

The Pensions Regulator issues fixed penalty fines to businesses who do not meet their auto enrolment duties and missing your staging 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.

2. Register with a pension provider.

You must choose and register with a pension provider that is suitable for your employees. Be aware that not all pension providers allow you to set up a pension scheme if your staging date has already passed.

3. 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. Any eligible employees need to be enrolled.

4. Communicate with employees.

Another employer duty is to inform your staff. You must communicate with all workers, including non-eligible jobholders and entitled workers. Your payroll software should be able to prepare these letters for you.

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. You will need to use the previous payrolls for any missed periods to calculate any missed pension contributions.

6. Complete your declaration of compliance.

Before you can become officially compliant you need to complete your declaration of compliance. If any of these steps are missed, The Pensions Regulator may take enforcement action. In certain circumstances, where the employer genuinely did not understand their duties or due to unforeseen circumstances have not been able to comply, TPR will work with the employer to ensure compliance. However, those who do not carry out the AE duties in accordance with the law will face enforcement action and penalties.

 

The Pensions Regulator will enforce non-compliance in a number of ways. This blog - What happens if you don't comply with automatic enrolment? looks at various non-compliance penalties that can be enforced by The Pensions Regulator.

 

Related article:

What if all your employees want to opt out

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