If you run a small business with only part-time staff then you might not need to have a pension set up by your staging date.
The Pension Regulator (TPR) seems to be hiding this fact – itâ€™s not written down in any of the hundreds of pages of detailed guidance. But weâ€™ve spoken to TPR and it confirmed our suspicions that if you employ only entitled* or non-eligible** staff then you donâ€™t have to have an auto enrolment pension scheme set up by your staging date.
This will come as a huge relief to small business owners, payroll bureau staff and anyone else currently grappling with the confusing pension rules. And will save small business owners time and money as the average pension can cost around Â£250 to set up.
You will only need to have a pension by your staging date if any of your staff are between 22 and the State Pension Age and earn over Â£10,000 a year.
If theyâ€™re earning less than this then the pressure is off. Youâ€™ll still need to assess your employees at the staging date and let them know about auto-enrolment and their right to opt in.
But if an â€˜entitledâ€™ employee asks to join a scheme you have as long as you like to set it up and you wonâ€™t have to pay into to it. And if a â€˜non-eligibleâ€™ employee opts in then youâ€™ll have six weeks to set the scheme up following the next pay reference date after the date that employee has opted in. You will also have to contribute to the pension scheme.
*Entitled employees have the right to join a scheme but you donâ€™t have to contribute
**Non-eligible employees have the right to opt in and you have to contribute