Is the Childcare sector ready for auto enrolment – are you ready?

Many small childcare business owners may be worrying  about the imminent introduction of auto enrolment.

The Pension Regulator has started sending out letters to employers who have at least one member of staff and must automatically enrol those who are eligible into a workplace pension scheme. The staging date for business owners with fewer than 30 staff is between the 1st April 2016 and the 1st April 2017.

To manage the employer responsibilities the employees are allocated into categories. All eligible workers, that is employees who earn over £10,000 per annum or £833 per month are automatically enrolled into the pension scheme.  The employee may wish to opt out and inform the employer and  pension provider but the employee must be opted in first.

The other categories which you may be unfamiliar with  are entitled worker and non eligible jobholder and they also have the right to join the pension scheme. These categories  are below the trigger for automatic enrolment but employees may still join the scheme.

The entitled worker may join the pension scheme but the employer is under no obligation to make a contribution. The non eligible job holder has a bigger incentive if they join as the employer must make contributions similar to eligible workers.

The government has introduced  minimum contribution rates. The starting point is 1% employer and 1% employee contribution until 30th September 2017. These rates gradually increase to a maximum employer contribution of 3% and an employee contribution of 5% from 2018 onwards.

Any childcare business who is struggling to understand the law or would like us to mange their delegated pension provision with NEST should contact us urgently. If  you require childcare auto enrolment, nursery auto enrolment, nanny auto enrolment  or childminder auto enrolment then we can set everything up for you.

At an early stage we decided to operate the government scheme NEST with our integrated payroll software. The pension is managed with low fees and the contributions are diversified into a balanced portfolio for the employee.

To set your pension up successfully all employers must plan ahead. Are you ready?

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