RHG Financial Services

Richmond House Financial Services Limited
are Chartered Financial Planners

Employer responsibilities and penalties

A number of employer duties have been introduced that will give millions of workers access to pension provision, many for the first time.

A key requirement is to automatically enrol certain workers, known as eligible jobholders, into a pension scheme that meets specific conditions to be an ‘automatic enrolment scheme’.

It is important for an employer to understand the different categories of worker –

  • eligible jobholders
  • non-eligible jobholders
  • entitled workers

– and the duties they will have in respect of each category.

Talk to us if you are unsure as to the status of one or more of your employees.

For all employers, compliance with the new employer duties and safeguards is compulsory. It is crucial that all employers understand how their workforce is categorised under the new legislation.

Action plan:

  • Review your existing benefits to ensure they remain relevant to the needs of your staff.
  • Audit your existing scheme to ensure it is appropriate and flexible enough to adapt to the new regulations.
  • Consider the structure of the scheme and whether you need a separate more sophisticated offering for higher earners.
  • Evaluate the administrative support you require from your IFA and the extent of advice offered to employees.
  • Understand the cost implications, consider options to minimise and budget accordingly.
  • Think about how to communicate this to your employees.

You must:

  • Establish a compliant pension scheme
  • Auto enrol / re-enrol all qualifying staff
  • Monitor all qualifying earnings
  • Deduct and forward contributions
  • Register / re-register schemes
  • Provide information to eligible and non-eligible jobholders
  • Provide information to the scheme provider
  • Process opt-outs / make refunds
  • Keep records and demonstrate your compliance

You must not:

  • Offer advice
  • Discourage membership
  • Provide a jobholder an opt-out form
  • Encourage opt-outs
  • Use ‘prohibitive recruitment conduct’ (such as employing someone on the basis they agree not to join the scheme)

If you would like further information on employer responsibilities and penalties then please complete our contact form or telephone0333 241 3350.

Employer responsibilities and penalties

Related services

RHG expert view

You've read about your responsibilities as an employer so you need to be ready for them. Plan ahead - don't leave it till the last minute.

Peter Murphy Dip PFS
Consultant, RHG

Richmond House Financial Services Limited (No 1842995) and Richmond House Investment Services Limited (No 01812617) are registered in England. Registered Address: Premier House, Argyle Way, Stevenage, Hertfordshire, SG1 2AD. VAT registration number 151 3296 28. RHG and the Richmond House Group are trading styles of both Richmond House Financial Services Limited and Richmond House Investment Services Limited, and RHG Investment Management is a trading style of Richmond House Investment Services Limited only. Both companies are separately authorised and regulated by the Financial Conduct Authority. The guidance and/or advice contained in this website is subject to the UK regulatory regime and is restricted to consumers based in the UK. The provision of advice to employers on Auto Enrolment is not a regulated activity. Further consumer advice is available from the Money Advice Service via this link www.moneyadviceservice.org.uk . The value of your investment can go down as well as up and you may get back less than you have invested.

Copyright Richmond House Group 2017