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How the new pension duties affect general practice

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GP practices have more laws, rules and regulations than most employers in the UK. Many of these are specific to general practice, though others are common across all employers. The pension regulations and obligatory auto-enrolment into a qualifying workplace pension scheme (QWPS) are examples of the latter.

An employer that doesn't put their employees into a QWPS by auto-enrolment risks a fine of up to £500 per day of non-compliance. This article explains what your pension duties are in the new era of auto-enrolment.

Who must be included in auto-enrolment?

Not everyone in general practice has to be included in a QWPS, but you will have to provide information about your QWPS to all employees, whether or not they qualify for auto-enrolment. Those who must be auto-enrolled are employees who are all of the following:

  • Not already in a QWPS
  • At least 22 years old
  • Haven't reached state pension age
  • Earn more than the earnings trigger
  • Ordinarily work in the UK

If an employee who doesn't qualify under the auto-enrolment qualifying rules wants to join the QWPS, then you must allow them to do so – though you're under no obligation to make contributions for them.

What if an employee doesn't want to be enrolled?

You may have employees who do not want to be enrolled in your QWPS. However, you must enrol them first before they opt out.

When must auto-enrolment take place?

Your employees must have been auto-enrolled by or on your staging date. If you don't pay your staff through a PAYE scheme, your staging date will be 1st April 2017.

You can find your staging date by entering your PAYE reference into the Pension Regulator's staging date application here.

It's important to have systems and procedures in place to monitor the eligibility of employees for auto-enrolment, keep records, and declare compliance with the regulations.

What if you're not prepared for auto-enrolment?

If you need extra time to get ready for auto-enrolment, you can opt for postponement on a per-employee basis. You can postpone for up to three months, but will need to tell the affected employee of the day of the postponement within six weeks.

During this postponement, the employee can opt in to the QWPS.

When the postponement period is drawing to a close, you will need to assess the employee for eligibility. If they are eligible, they must be auto-enrolled (postponement can only be used once per employee). If not eligible, then you will have to monitor for eligibility on every pay period.

Your obligation to monitor your employees for auto-enrolment eligibility

After your staging date you will need to monitor all employees who have not been auto-enrolled for eligibility for auto-enrolment. An employee who is not under postponement and who has not previously been auto-enrolled should be auto-enrolled into the QWPS (or placed under postponement while you organise the necessary paperwork).

Keeping auto-enrolment records

Your general practice HR responsibilities are clearly going to increase, and this includes the need for good recordkeeping with regard to auto-enrolment. You'll need to keep records about all employees and the pension scheme used as the QWPS.

Records can be kept on paper or electronically. For those who have opted in and been auto-enrolled, these records must be kept for six years. For those who have opted out, records must be kept for four years. The Pensions Regulator can request to see your auto-enrolment records at any time.

Cyclical re-enrolment

You'll need to assess whether or not to re-enrol your employees into the QWPS every three years, in the three months prior to the anniversary of your original staging date. Re-enrolment must be made if the employee is not:

  • An active member of a QWPS
  • Being monitored every pay period and they opt out or cease membership more than 12 months earlier

You can't postpone at the point of cyclical re-enrolment.

In conclusion

The NHS Pension Scheme is a QWPS, but it may not be right for all your employees, and you may need to explore other schemes to meet legal requirements.

Don't delay preparation for auto-enrolment. If you aren't prepared for auto-enrolment on your staging date, your practice could find itself penalised with a hefty fine.

For more information, visit The Pensions Regulator's website and review their detailed guidance on automatic enrolment.

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