Auto-enrolment

The government's auto-enrolment regulations will change the face of workplace pensions

Wake up to your new duties – they will apply to you.

At the moment, if you employ 5 or more people, then you are legally obliged to provide your employees with access to a pension scheme.

While most large and many medium-sized employers contribute towards the cost of an employee’s pension arrangement, many other medium-sized and most smaller employers do not, leaving the employee to pay the full cost of his or her pension provision.

Most employers who do contribute on behalf of employees require them to actively join the scheme and, as a result, many employees end up not joining.

That's all about to change.

Between October 2012 and February 2016, all employers will have to auto-enrol all employees earning more than £7,475 a year into a pension scheme and make contributions on their behalf. All employers will be advised of their “staging dates” – the largest employers will have staging dates of 1 October 2012 while employers employing fewer than 50 employees will have a staging date that could be as early as 1 March 2014.

After a phasing-in period ending on 1 October 2017, employers will have to make minimum pension contributions of 3% of relevant earnings into the pension scheme, while employees will have to pay a minimum of 4%. The Government will chip in with an additional 1%.

The key differences between the current stakeholder and future auto enrolment legislation are:


Your staging date might be some way off  but you do need to be planning ahead. After all, you're going to have to deal with this new legislation eventually and time spent now might save time and money later. As you would expect, there is quite a lot of detail involved:

• If you do not currently contribute on behalf of your employees, then your costs are going to increase. Your costs will probably  increase even if you are currently contributing on behalf of your employees,

• You are going to have to review the way you hire and pay people,

• You are going to have to make arrangements to ensure that pension contributions are remitted accurately and promptly

• You are going to have to deal with the consequential paperwork, and

• non-compliance is not an option – the new obligations will be enforced The Pensions Regulator.

We can help you

To help you sleep soundly at nights we can support you through this new legislation, identifying opportunities to keep costs under control and ensuring that you comply fully with your new obligations.

For a fixed fee Grove auto-enrolment support offers you:

• an annual Report setting out the current legislation and how it affects your Company specifically, in terms of the cost implications and the decisions and actions that you will need to take over the next 3, 6 and 12 months
• alerts advising you of developments between annual Reports and how they impact your Company
• unlimited email access if you have any questions on how to deal with your new obligations, and
• regular Questions & Answers documents reflecting the most frequently asked questions.

For a service specification, subscription details and further information, click here

click here to find out to find out more about choosing the right pension scheme

For further guidance on this or any other employee benefit issues, please contact us 

 

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