How to set up a workplace pension for employees: a guide for directors

An introduction to workplace pensions 

In a nutshell, workplace pensions are designed to help workers in the UK save more money for retirement. A successful workplace pension encourages greater financial freedom when an individual decides to leave the workplace. 

In most cases, a percentage of salary is automatically placed into a pension scheme every payday, with the employer also adding additional money into the pension scheme and additional tax relief from the government. The pension can be tracked and managed to ensure that future finances are taken care of. 

Following retirement, the funds you have saved over the years are then reimbursed for you to control. The rules and regulations of how you will be paid and the various processes that are included within the workplace pension scheme often differ between workplace pension providers.

Why set up a workplace pension scheme? 

Following the introduction of auto-enrolment by the Government in October 2012, it is now a legal requirement for employers to provide a workplace pension scheme. The employer must meet their legal duties and contribute towards the workplace pension scheme in the same manner that an employee would. 

The only time workplace pension contributions are not necessary for an employer is when the employee withdraws from a pension scheme by opting out. To do so, the employee must give confirmation to the pension provider that they wish to opt out from the pension scheme.

This makes employee pensions a vital priority for employers to ensure they remain fully compliant with the enforced pension regulations. For businesses that are non-compliant with workplace pension regulations, The Pensions Regulator (TPR) can take enforcement action; which includes the issuing of compliance notices, penalties/fines and escalating penalty notices.

Legal aspects to consider when setting up a workplace pension  

  • It is the employer’s full responsibility to ensure that they comply with the workplace pension regulations 
  • If you don’t comply, you can face enforcement action and fines 
  • Any missed contributions through late compliance will need to be backdated and paid in full as if they had been compliant (based on age and earnings criteria) 
  • When backdating contributions, both the employer and employee must pay all unpaid workplace pension contributions (or alternatively, in the case of enforcement, the employer can be asked to pay the whole sum)
  • Criminal offences and prosecutions can be enforced if an employer deliberately fails to enrol eligible staff or includes false information in the compliance declaration 

How to set up a workplace pension for employees 

If you’re looking for information as to how to set up a pension for employees, our step by step guide can help you better understand the most beneficial route to take. 

Step 1 – Find out your Duties Start Date

Your Auto-Enrolment obligations begin on the day your first member of staff joins your business. This is known as your Duties Start Date (Staging Date) and this date cannot be changed.

As an employer, you must have your pension scheme setup within six weeks of your Duties Start Date to avoid any enforcement action from TPR. Even if you have passed your Duties Start Date or you are not sure when it is, Husky can help.

Step 2 – Choose your pension provider

Once the duties start date is defined, it’s time to choose the right workplace pension provider for your business and your staff. Choosing the right pension provider is influenced by a number of factors, and is often based on your company size and workforce details. 

Husky’s pension comparison tool makes it easy for you to choose the right pension provider. For the first time, you get full transparency over fees, investment strategies and more, including the unique ability to not only rank schemes by pricing but to also rank them by their responsible investment score..

Moreover, with Husky, employers get access to preferential pricing that they cannot get independently, allowing you to save up to 80% for your business and staff. 

Step 3 – Setting up a pension scheme

Employers will have to then set up the chosen workplace pension scheme to allow for pension contributions to be made in a timely manner to the pension provider. Although this may seem simple, the process includes a number of rules and regulations that must be followed accordingly.

Things to consider when setting up a workplace pension: 

Without expert help and guidance surrounding workplace pensions, it’s easy to make mistakes. If you are to set up your workplace pension scheme alone, you must understand all the following points: 

  1. Setting up a workplace pension scheme can be very time consuming
  2. You must understand TPR’s rules prior to setting up the workplace pension 
  3. If not set up correctly, the process is even more time consuming through ongoing administration problems
  4. Audited communication is required between you and your staff, even if they are not eligible
  5. Every workplace pension scheme is different, with some more complicated than others, so you must understand the required processes of your pension provider 
  6. Your workplace pension scheme can be audited at any stage, and if not compliant, you can be penalised
  7. You must complete your declaration of compliance to avoid any penalties or fines 

This setup process, along with the ongoing administration and communication with the pension provider, staff and The Pensions Regulator can be complicated as well as very time consuming. If not set up correctly, you also face the ongoing time constraints of fixing any problems that may arise. 

That’s not all, the employer is required to assess their workforce, communicate with all their staff (even if they do not have to be enrolled) and also communicate with The Pensions Regulator by completing the Declaration of Compliance. With regards to opting out, It is important that the employer is not seen to be influencing their staff’s decision of opting out of the pension scheme in any way.  

Husky can do it for you

Husky can help employers choose, set up and run their workplace pension scheme whilst ensuring compliance with the Auto-Enrolment legislation. We handle all the nitty gritty details with ease from the very outset of our workplace pension service so you can stay focused on other work related priorities. 

Husky makes workplace pensions easy: 

  • We deal with all aspects of compliance and auto-enrolment 
  • Husky helps thousands of businesses choose and save up to 80% on exclusive preferential rates by choosing the perfect provider 
  • Husky setup the scheme and also manage daily administration
  • Our innovative pension management is made as easy as online banking 
  • We bring employee pensions to life with the Husky for Everyone App
  • Client relationships can be strengthened for advisors and accountants 
  • Husky helps thousands of businesses save up to 80% on exclusive preferential rates 
  • Greater financial freedom for your employees 

Husky Finance takes full responsibility of your workplace pension; removing the compliance risks from your business and making it a stand out employee benefit whilst saving your business money. Our team of workplace pension experts are there to help you stay compliant with all regulations, whilst your employees can take control of their workplace pension just as they would online banking. 

At Husky, we make workplace pensions easy by offering the future technology of pension control. Regular communication between your business and our team ensures that all aspects of your employee pensions are compliant with the Auto-Enrolment legislation so you can sit back and relax. 

Let’s talk about workplace pensions! 

Luckily, Husky makes all of the above easy. We make workplace pensions work harder so you don’t have to. If you are interested in developing a prosperous relationship with Husky Finance for better workplace pension control – contact a friendly member of our team today. Our workplace pension experts will be happy to assist you with any questions or queries that you may have. Stay compliant and make more money for your business and your staff with Husky Finance. 

Leave a Reply

We are using cookies to give you the best experience. You can find out more about which cookies we are using or switch them off in privacy settings.
AcceptPrivacy Settings

  • Husky Cookie Policy

Husky Cookie Policy

Our Cookies Policy explains what cookies are, how we use cookies, how third-parties we may partner with may use cookies on the Service, your choices regarding cookies and further information about cookies. 

See our cookies policy here.