Much has been written about pensions over the last few years and in particular the idea that all employees should be enrolled in a pension scheme.
The Government is pushing ahead with plans to force all firms to auto-enrol all employees into a pension scheme, but in a recent announcement it became clear that only those employees aged 22 and over, earning more than £7,475 will be included. Note that employers will have to make contributions to employees’ pensions – so those that currently do not do so should start to plan now for this increase in employee costs which will ultimately become a minimum of 3% of salary.
The Department for Work and Pensions (DWP) has confirmed that UK companies will have to offer a pension scheme from October 2012. This will be introduced on a staged basis between then and September 2016 – the precise date being dependent on the number of employees. Those employers not offering their own scheme will have to use the new National Employment Savings Trust (Nest).
The DWP has made some concessions to employers over the original proposals, with firms to be given 12 weeks' grace before employees are automatically enrolled, to ease the burden on those employing large numbers of temporary workers.
In addition, Nest will not force anyone earning below the £7,475 PAYE threshold to enrol but will allow those on a percentage earnings band between £5,000 and £7,475 to opt in.
Employers are advised to consult their Company financial advisors for specific details.
Posted on 19 Nov 2016