Know your staging date

What is a staging date?

Your staging date is the date your automatic enrolment duties come into effect. You must be prepared for this date, at which point you are obliged to have a suitable pension scheme in place. The law on the new employer duties and safeguards commenced in July 2012. Each employer is allocated a date from when the new duties will apply to them, known as their ‘staging date’. The staging dates started from October 2012. Finding out their staging date should be an employer’s first step in getting ready for the new duties.

Stagecoach in Switzerland (Photo credit: Wikipedia)

How to find out your staging date

The Pensions Regulator website has a useful tool that will let you know your staging date. All you need is your PAYE reference.

Larger employers have already had their staging date with smaller employers to follow over the next couple of years. The chart below displays forecasts from the Pension Regulator showing how many employers are expected to have their staging date per quarter.

Employers staging by quarter

The process started with larger employers and over the coming months smaller employers will reach their staging dates too. At the peak of activity, more than 200,000 employers will have to set up an auto enrolment pension scheme (215,000 January to March 2017).

What you need to do – NOW!

If your staging date isn’t until after March 2016 you might think you can take it easy for the moment. When you look at the bar chart for Q1 2016/17 above you will see that 101,000 other employers will be coming on stream between April and June 2016 – and that is after 110,000 employers are due to reach their staging date in the preceding quarter.

The Pension Regulator has produced “The essential guide to automatic enrolment” which will help you to prepare for your staging date. Very few small employers will be able to prepare for auto enrolment without some external help, whether from Independent Financial Advisors or accountants and payroll advisors. If you are one of more than 100,000 employers trying to find help you may find that there is no capacity left in the market to turn to – or that you end up paying grossly inflated prices for advice. The timetable suggested by the Pension Regulator suggests that it could take between 9 and 12 months to set up a compliant pension scheme if you don’t already have one.

Many small employers will find that they have a very small choice of pension providers. The 3 or 4 pension providers who will take the smallest of employers will be inundated with applications – more than a million over a two year period. With the best will in the world, it is unlikely that the volume of applications will be able to be processed in time for everyone’s staging date. To avoid penalties get yourself started on the process now!

What happens if you don’t..

The Pensions Regulator can issue penalty notices to punish persistent and deliberate non-compliance.

A fixed penalty notice will be issued if you don’t comply with statutory notices, or if there’s sufficient evidence of a breach of the law. This is fixed at £400 and payable within a specific period.

They can also issue an escalating penalty notice for failure to comply with a statutory notice. This penalty has a prescribed daily rate of £50 to £10,000 depending on the number of staff you have.

They can also issue a civil penalty for cases where you fail to pay contributions due. This is a financial penalty of up to £5,000 for individuals and up to £50,000 for organisations.

Where employers fail to comply with a compliance notice or there is evidence of a breach, they can issue a prohibited recruitment conduct penalty notice. This penalty has a prescribed rate of £1,000 to £5,000 depending on the number of staff the employer has.

Alterledger can help!

Alterledger can help you prepare for your staging and manage your auto enrolment process along with your payroll once everything is up and running. Please contact Alterledger for more information and a free initial meeting.