What happens if my staging date is missed?

Many businesses must launch auto-enrolment workplace retirement plans by the staging date. But what happens if your company is not ready? It is not ideal to miss the staging date, but there are steps you can take to correct the situation.

A letter from the Pensions Regulator will be sent to any business that does not have a workplace pensions program. This confirms the staging date and when auto-enrolment duties begin. Although there should be ample time for a company to establish its workplace pension scheme, it is not common for owners to prioritize pensions during daily business operations.

Fast action

If you miss the staging date, it doesn’t mean you are out of luck as long as you take action quickly to correct the situation. You may be allowed to delay the implementation of your workplace pensions plan for up to three years if it’s less than six weeks from the staging date.

Notifying your staff about the postponement must be done in writing. You can download a template for a postponement letter from the Pensions Regulator.

Locate a pension provider

Choose a pension provider. Tell them that you missed staging date. They will need to set up a pension plan as soon as possible.

Contact the pensions regulator.

The Pensions Regulator can impose heavy fines on late companies if they miss their staging date. Get in touch with the Pensions Regulator immediately to let them know you are working on a scheme. They may grant you leniency if your pensions plan is up and running within three months of the staging date.

Contributions can be deducted.

You must still deduct contributions from employees and set aside the employer’s share of any workplace pensions scheme that you do not have on the staging date. These backdated contributions must be added to each employee’s pension account once your scheme is launched.

Do not exceed the period of postponement.

Failure to set up a workplace pensions plan within the three-month postponement period could result in serious financial penalties for your company. The Pensions Regulator may also ask you to pay the employer and employee’s part of the pension contributions. You may be asked to pay interest on money not paid into a pension plan.

Don’t miss the staging date.

It will save you a lot of trouble if the staging date is met. It cannot be very clear to set up a workplace retirement plan. This is why it is important to get financial advice. Dhpayroll can help you understand the process and guide you through how to enrol your employees.