Running a pension scheme

Under current rules, employers have the following responsibilities for their workplace pension schemes.

Paying contributions on time

Firstly, you must ensure that the pension contributions are paid on time and that the money is handled properly.

Employees' contributions must be paid within 19 days of the end of the month in which they were deducted from pay. Missing this deadline can have serious repercussions - in some circumstances, trustees may have to report this to the Pensions Regulator and you may be liable to a fine. Your contribution must be paid by the date shown on the payment schedule.

Separate pension fund assets

You must have systems that differentiate between the assets of the business and the assets of the pension fund, and ensure that the latter is never used within the business.

Inform and consult employees

You must also ensure that there is adequate information and consultation with employees. For example, consult with employees if you decide to increase the pension age, close the scheme to new members, or stop employer contributions. This is now a legal requirement in respect of all workplace schemes.

Trustee assistance

You must also assist the trustees of defined benefit schemes in the performance of their duties, eg communicating with members. You have a legal responsibility to give employee trustees adequate paid time off to do the job and for training purposes.

If you are offering a group personal pension or stakeholder arrangement - where there are no trustees - you might also need to get involved in consulting and communicating with members on wider issues, eg when there are going to be changed to eligibility requirements or employer contributions.

If things go wrong

You have a legal responsibility to inform the Pensions Regulator when things go wrong, whether the problem is yours, that of the trustees, or that of others involved with the scheme such as the administrator. Read Pensions Regulator guidance on reporting breaches of the law.

Automatic enrolment into a workplace pension

All employers must provide workers with a qualifying workplace pension. This process called automatic enrolment, started in October 2012. Read more on automatic enrolment into a workplace pension.

For more information, see know your legal obligations on pensions.