What if I miss my staging date?

Most businesses need to launch auto-enrolment workplace pensions schemes by their staging date, but what happens if you’re not ready when the date arrives? Missing the staging date is not ideal, but fortunately, there are steps that you can take to rectify the situation.

Any business without a workplace pensions scheme will have received a letter from the Pensions Regulator that confirms the staging date, which is when auto enrolment duties come into effect. There should be plenty of time for a business to set up its workplace pension scheme, but in the hectic process of running a business, not all owners have made pensions a priority.

Act fast

It’s not the end of the world if you miss the staging date as long as you act fast to rectify the situation. If it is less than six weeks after the staging date, you may be allowed to postpone the introduction of your workplace pensions scheme for up to three months.

You must inform your staff of the postponement, and this needs to be in writing. The Pensions Regulator provides a postponement letter template you can use for this.

Find a pension provider

Research and choose a pension provider. Explain to them that you have missed your staging date and need a pension scheme set up as soon as possible.

Contact the pensions regulator

If you miss your staging date, the Pensions Regulator has the powers to impose hefty fines on companies that are late. Contact the Pensions Regulator as soon as you can and let them know that you are in the process of setting up a scheme. Once satisfied that your pensions scheme will be up and running within three months after the staging date, they may be lenient and not fine your business.

Deduct contributions

If you have not got a workplace pensions scheme on the staging date, you still need to deduct contributions from your employees and put aside the employer’s portion of the contribution. Once your scheme has been launched, these backdated contributions need to be added to each employee’s pension account.

Don’t go beyond the postponement period

If you fail to have a workplace pensions scheme up and running by the end of the three month postponement period, this could cost your business a lot. As well as fines, the Pensions Regulator could ask you to pay for both the employees’ and the employer’s share of the pensions contributions. They may also ask you to pay interest on the money that has not been paid into a pensions scheme.

Avoid missing the staging date

Obviously, it will avoid a lot of hassle if you don’t miss the staging date in the first place. As setting up a workplace pension scheme can feel complicated, it helps to seek financial advice. Speak to a pensions expert here at Endeavour Financial Planning who can demystify the whole process so that you are clear on precisely what you need to do to set up a workplace pensions scheme, and how to auto-enrol your employees.

Auto Enrolment advice is not regulated by the Financial Conduct Authority.