What do you need to know? Running a pension scheme can seem complicated. Below, we take you through the key things you’ll need to understand to keep your scheme running smoothly.
Key topics
Auto enrolment in eight easy steps
Auto enrolment can seem complex, so we’ve provided our eight step guide to tell you how to complete your auto enrolment duties.
Employees have to meet certain criteria to become members of your workplace pension. Find out who’s eligible for auto enrolment and how to assess your staff.
How will you calculate your employees pension contribution? How much of your employees salary do you need to deduct contributions from and how will your calculations be affected by tax relief?
Salary sacrifice is where an employee agrees to give up part of their salary or bonus in exchange for a benefit paid by their employer; in this case, the benefit would be a pension contribution. It will involve a change in contract between the employer and employee. After sacrificing the agreed amount, you, the employer, would then make a payment of the equivalent amount into the employee's pension pot.
As a result, they receive a reduced salary, meaning the National Insurance payments that you and your employee pay will be lower.
Salary sacrifice may not be suitable for all employees, for example, it may affect the level of some future state benefits or affect an employee's ability to borrow.
If I use salary sacrifice, how will it affect the contributions I pay to Aviva?
If you use salary sacrifice, when you make payment contributions on behalf of your employees, you will need to send this as an employer pension contribution.
What is the Employer Pension Charge for?
We charge an on-going fee each month to run your workplace pension scheme. In return for this fee, we provide a software and support package that’ll help you with the administration involved in running your workplace pension.
The fee will begin from the start date of your scheme and is exempt from VAT.
This fee does not cover your pension contributions. Your pension contributions will need to be paid to us each month using MyAvivaBusiness.
My employee has said they don’t want to join, do I have to automatically enrol them?
Yes, all eligible employees must be auto enrolled into a pension scheme before they can opt out. Your employee will need to contact Aviva once they’ve received their membership pack to tell us they wish to opt out. If a pension contribution has already been received before the employee opts out, we will refund the contribution back to you.
What if someone earns enough to trigger enrolment one month but not the next?
Staff who earn £833 a month (or £192 a week) during a pay period and are aged 22 to state pension age are classed as eligible jobholders. You must automatically enrol them into your pension scheme and make contributions for them (unless you’re using postponement).
Once a member of staff has been auto-enrolled into the pension scheme, if their earnings drop beneath the relevant minimum eligibility criteria in subsequent months, they will still remain a scheme member but they may not have to pay contributions, depending on the way you calculate them. If they want to leave the pension scheme, they will need to opt out.
What's next
Working with payroll and other software
The type of payroll software you're using will affect what, if any, tasks you'll need to complete for your pension scheme each time you run your payroll.
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