The government has introduced a new law to make it easier for people to save for their retirement. It requires all employers to enrol their workers into a qualifying workplace scheme if they are not already in one. At present, many workers fail to take up valuable pension benefits because they do not make an application to join their employers scheme. Automatic enrolment is meant to overcome this.
From October 2012 UK employers will be required to automatically enrol employees into a ‘qualifying workplace pension scheme’. One of the key points regarding auto-enrolment is that there is no obligation to have a NEST pension. Auto-enrolment could be to your existing company pension scheme if it meets the following criteria:
• If permitting employees to be automatically enrolled.
• There are minimum contributions for most schemes this will be 8% of band earnings by 2017 with a minimum of 3% coming from the employer and 5% from employees.
• It allows employees to join on a ‘no-decision’ basis.
• It is possible that existing Group Personal Pensions and Group Stakeholder Pensions, Final Salary and other occupational pension schemes, will meet many of the auto-enrolment criteria.
What should employers do now?
As the deadline for employers approach, employers should:
• Check their staging date.
• Assess their workforce to identify non-eligible workers and entitled workers.
• Review current pension schemes.
• Inform employees about the changes and what pension scheme they have in place and who will be eligible.
• Register with The Pensions Regulator and keep records.
• Auto-enrol.
• Employers should note that wilful failure to comply with the duties is a criminal offence. If you need help please do call us or visit the Pensions Regulator website www.thepensionsregulator.gov.uk/automatic-enrolment.aspx
If we can help please contact Nighat on 01403 831221 or email us: [email protected]
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