What is a Staging Date?
Pensions automatic enrolment will not apply to all businesses at the same time. A staging process has been set where large employers will be subject to pensions auto enrolment first, followed by employers with increasingly smaller numbers of employees.
By April 2017 automatic enrolment will applicable to all businesses, so it is important that you know when your business will be affected.
Your business’ staging date will be based on how many employees you had on your PAYE scheme on 1st April 2012. If you are unsure how many employees were on your PAYE scheme at that time take a look at your payroll records or 2011/12 P35.
Your staging date cannot be pushed back, however it can be brought forward; which may be useful if you want to align your staging date with your pay reference period.
What is the schedule for Staging dates?
- Very large employers (120,000+ employees) – 1st Oct 2012
- Large employers (10,000-119,999) – 1st Nov 2012-1st Mar 2013
- Medium employers (1,250-9,999) – 1st Apr 2013-1st Sep 2013
- Small to medium employers (250-1,249) – 1st Oct 2013-1st Feb 2014
- Small employers (50-249) – 1st Apr 2014-1st Apr 2015
- Smaller employers (30-49) – 1st Aug 2015-1st Oct 2015
- Remaining employers (29 or less employees) – 1st Jan 2016-1st Apr 2017
It is worth noting that although your implementation date cannot officially be pushed back; there is a way to delay pensions auto enrolment for individual employees. Postponement allows automatic enrolment to be delayed for three months. This option has unsurprisingly been taken up by larger employees who have already reached their staging date.
Postponement is a tool you may want to consider, however you shouldn’t let it put back your preparations for your staging date.
Understanding Staging dates
Although it may be tempting to put off preparation for automatic enrolment, particularly if you are an employer of a smaller business, you should get on-top of it as soon as possible.
A significant amount of work will need to go into preparing for auto enrolment so it is advised that you begin preparing a year in advance of your start date, in order to give you enough time to ensure you are compliant with the new regulations.
The Pensions Regulator will write to you 12 months and 3 months ahead of your staging date. At this point you can indicate whether you want to bring your staging date forward or stick to the one allocated to you based on the size of your PAYE scheme. Once you know your business’ staging date, you then need to work out what changes you need to make in preparation for auto enrolment. You should bear in mind that although staging dates are always at the first of the month, they won’t necessarily match up with pay reference periods. So depending on when your pay day is, you may be required to start fulfilling your new auto-enrolment responsibilities before the staging date.
Important facts that you will need to consider in preparation for your Staging Date
- Auto enrolment will be applicable to all businesses by April 2017
- Communication guidelines and on-going compliance requirements must be followed by employers
- Technology will help employers to keep on top of auto enrolment requirements
- Automatic enrolment will mean that employers will have to contribute at least 3% of salary into pension schemes for their employees
- Employers will be required to deduct the employee pension contributions and send both the employee and employer contributions to the relevant pension company
- New employees to your business must be enrolled on a pension scheme with 12 weeks of starting
- For employees who opt out of a pension scheme detailed procedures must be followed
- Auto enrolment will affect employees who are over the age of 22 earning above £8,105 per year that are not currently on a pension scheme
- A penalty regime will be used to punish non-compliant businesses