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As lots of small and medium sized businesses reach their staging date, a growing number of them are either setting up their scheme after their staging date has passed, or just not setting up the scheme at all!
During the second quarter of 2017 nearly a fifth of employers (18%) who were due to set up a scheme, applied to a provider after their staging date had passed according to Aviva.
In the first quarter last year, only 1% of employers applying to set up their scheme were late stagers which shows what a dramatic increase this year has seen.
Businesses who are staging late are limiting their options somewhat, as not all providers will accept a business that is staging late. There is also a risk of a fine from The Pensions Regulator for non-compliance as well as causing confusion with employees as more and more employees become aware of the workplace pension scheme due to extensive advertising from The Pensions Regulator.
As well as the increase in late stagers, Aviva has also seen a decline in companies that are setting their scheme up over two months before their staging date. According to Aviva’s figures, only 19% of companies are setting up well in advance, which is a drop from a high of 40% at this time last month.
The numbers don’t quite tell the whole story as newer companies are formed and are now going through auto-enrolment, so it was expected to see a drop in early stagers.
The responsibility for staging on time lies solely with the employer and The Pensions Regulator will begin by issuing statutory notices for employers who are late to stage.
If these notices are ignored, they will be followed up with a penalty notice which can be recovered through the courts.
If you are late to stage, you will be expected to put staff into the position they would be in had you staged on time – if necessary, this will include backdating missed pension contributions back to your staging date. If employers are found to deliberately not enrol eligible employees or knowingly include false information in a declaration of compliance this could result in prosecution as it is a criminal offence.
It really is worth spending a little time to ensure you are staging on time as failure to do so will potentially cost more time and money.
If you want more information on the Workplace Pension, you can visit The Pensions Regulator website for advice on your duties.
Source: Reward Strategy