It’s understandable that you may have a lot of questions regarding auto enrolment. For example, if you’re a director-only business, does the regulation apply? Can you delay auto enrolment? What if you already have a pension scheme in place – does this fulfil requirements? 

Here are some of our frequently asked questions and answers:

Q) I already offer a pension scheme to my employees, so these regulations don’t impact me. Is that right?

A) Not necessarily. Simply having a pension scheme in place does not fulfil the regulatory requirements. You would need to carry out an assessment of your workforce, communicate with them regarding their eligibility status, automatically enrol those employees meeting the criteria, and communicate with the pension regulator. You would also need to ensure you meet the minimum contribution levels. 

If you have an existing scheme in place this can potentially be used for auto-enrolment, but it doesn’t automatically fulfil the criteria simply by existing. 

Q) I’ve heard that you can delay having to do auto enrolment if you want to. Is this true?

A) Your staging date is not moveable. However you can use what is referred to as postponement rules to delay the first deductions of pension. 

Postponement rules are not in place simply to allow you more time if you are unprepared. The purpose of the rules are to delay the start of pension deductions to a more suitable payment period for a number of valid reasons. These could be to align deductions to the next pay period, for example if your staging date is 1^st May 2017, this falls within tax period 1 so deductions would be due in April on a monthly payroll, if you postponed for 1 month this would allow for deductions to commence in May. 

Postpone rules can also be applied for specific groups of workers for example new starters. This is useful if you don’t want new starters to join the scheme immediately on starting employment. 

The maximum period you can postpone is for three months (or 12 weeks).

Q) My business consists only of directors – we do not employ any staff. Do we need to comply with regulations?

A) If you are a director-only business you do not need to follow the auto-enrolment regulations. You do however need to advise the pension regulator of your business status, otherwise they will assume that you are an employer and will be expecting to receive correspondence from you. 

Additionally if at a later date you do employ staff, and your staging date has passed, you have six weeks from the date you first employed someone to become compliant with the regulations. 

Q) Do I have to use the template letters provided by the Pension Regulator? 

A) You are not bound to use the template letters provided by the Pension Regulator, however we would recommend that you do. There are certain aspects of the letters that are mandatory to communicate, using the template ensures that you have everything covered. 

Our pension auto enrolment guide answers more frequently asked questions like these. Click here to download the guide and find out how to get started.

If you’d like to speak to someone about your auto enrolment responsibilities and how the KPMG Small Business Accounting service for design businesses can help you meet your employer obligations complete a contact form at kpmgsmallbusiness.co.uk/design-industry or call us on 0808 231 0660.