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My accountant has informed me that to comply with the (not so new ) compulsory pension scheme that I must have for my employees it will cost several thousand pounds. Even if if neither of my part time employees decide to join (I must not influence their decision) I still have to have the scheme in place as they may decide to join later. Can it really be this expensive or have I misunderstood?

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  • PRO
    I think you have to have ten staff or something like that.
    Someone will come on who knows better than me but Im almost sure you won't need it for two part timers.
  • The Pensions Regulator website is the best place to start:

    http://www.thepensionsregulator.gov.uk/

  • PRO

    Pension auto enrolment for most micro business is staged to be later this year or 2016. For us, we've been advised it's next year.

    There are two main 'costs'

    1/ the initial pension fund setup costs, followed by yearly charge.

    2/ the mandatory employer contribution (therefore dependant on the no. of employees).

    You must not influence or give advice to your employees. They will be auto enrolled by default but they can decide to opt out subsequently.

    A lot of accountancy practices will tie up with pension providers to offer scheme but there are strict rules and they must be authorised.

    Maybe one low cost solution is from the FSB which operates schemes starting at £399 upwards ( you need to be a member. Worth a look or to use a barter your accountants down ;-)

    • Just started looking into this, as I'm a member of the FSB this seems like the easy route to take, but are there cheaper alternatives? I haven't been able to find any other prices quoted by searching online.
  • PRO

    Be careful with part timers -the Working Time Directive ensures PT's are treated the same as FT people in terms of hours, holidays & benefits ... so understand they will be covered ( pro rota ).

  • This reply was deleted.
    • PRO

      Any costs a business incurs will ultimately make its way into "business charges", so potentially the 'customer/client' foots the bill or the business decides to absorp via its "profit".

      You can not unilaterally reduce an employees hourly rate to pay for the pension contributions - that would be seen as a clear case of constructive dismisal leaving the employer open to an Industrial Tribunal case (unless mediated out first), Any pressure on employees to unfairly accept a lower wage would also be the same.

      An employer can not explicitly or implicitly advise an employee to not participate in the scheme. The employer has to remain neutral. The employee can assess and decide to exit scheme after their mandatory enrollment (unless under 21).

      Part timers are included, but pension contributions are directly related to their pay. If they are not working, they are not being paid unless their statement of employment says otherwise. Suggest many employers will be looking closely at contracts for part time workers. Not sure hour Zero Hrs contracts willl fare....

      Like many Acts - the intention is good, the execution leaves a lot to be desired...

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