Pensions are long term investments. You may get back less than you originally paid in because your capital is not guaranteed and charges may apply.
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A staging date is the date that the government and the pensions regulator say that your company must have a compliant pension set up by. Your staging date will vary depending upon the size of the company, how many people the company employs and when the company first started paying its team through the PAYE system You can re-enrol your eligible employees up to three calendar months either side of this date.
You will have already given every eligible employee details of the pension scheme and an opt-out notice to complete should they decide they do not want to pay into a pension.
All eligible employees have a month from the staging date to opt-out and get their first pension contribution back.
If their contributions have already gone to the pension provider, ask them to refund the money.
If any of your employees opt-out within the first month of their auto enrolment they can ask to opt back in at any time.
You only need to accept their notice to opt-in once in a 12-month period. This is to stop any employees opting out and in several times in a year.
Every new starter is assessed in the same way you assessed your entire workforce before your staging date. Find out how to assess your employees for eligibility for auto enrolment here.
Whether your new starter is eligible or not, you must still give them all of the information required for them to understand all the options available. This is still a legal requirement set out by The Pensions Regulator.
You can choose to postpone the registration of any new employee for up to three months, which gives you time if you wish for them to pass a probationary period before qualifying for your workplace pension scheme.
If an employee becomes eligible for auto enrolment into your workplace pension after your staging date, you should give them the information about auto enrolment, although at this stage they may have already opted in or asked to join your workplace pension.
The main difference now is that your payroll system will identify that they should be automatically enrolled on the three year re-enrolment anniversary of your staging date.
If they are still eligible for automatic enrolment at this time they will then have to opt-out if they do not want to pay into the pension.
This might happen if you have an employee who goes from a full time employment contract to a part-time contract.
If they were automatically enrolled, they will remain in the workplace pension.
When the re-enrolment date comes up, they will have to 'opt-in' to remain part of the pension scheme if they are still not eligible to be automatically enrolled.
If an employee leaves your business you no longer need to contribute to their pension (this is a requirement for auto enrolment).
You need to update your payroll software with the termination date and notify your pension provider that the exiting employee will no longer be contributing towards their pension.
It is the exiting employee who is responsible for transferring their pension across to another provider through a new employer if they wish to.
The Pensions Regulator can fine you if you do not follow their guidelines by your staging date. This fine can start at £400 and escalate to as much as £50,000 for larger organisations.
You can help ensure you have the retirement you want by finding the best personal pension plan to make your money work as hard as it can.