Workplace Pensions Are You In ?
Automatic Enrolment Are You Ready?
Automatic enrolment is being rolled out, in stages, across all employers from October 2012, starting with the larger employers.
By 2017, all companies- including small to medium size enterprises (SME’s)- will need to have enrolled their employees into a pension scheme.
Why has Automatic enrolment been introduced?
For many years it has been recognised that most people are not saving enough for retirement and can no longer live comfortably on the State Pension.
It is also a fact that people are living longer creating a strain on the State benefits system.
The Government introduced pension reforms through the Pensions Act 2008 that requires all employers to offer workplace pension schemes and to enrol eligible workers into their schemes. These reforms have become known as automatic enrolment.
The reforms recognise that not all workers are eligible for automatic enrolment and that others, such as the self-employed, do not qualify. Provision has been made to allow those who fall outside of automatic enrolment to also join pension schemes and start building retirement benefits.
Automatic enrolment has been designed so that eligible workers who want to build up retirement savings don’t have to take any action themselves – employers will automatically enrol eligible workers into a workplace pension scheme and deduct any contributions that the member is required to pay from their wages or salary, and then pay into the pension scheme on their behalf.
What you need to do in order to remain compliant
(Doing nothing is not an option! Businesses can face fines of up to £2500 per day for employers with 50-249 workers, or £500 per day for employers with 5-49 workers).
Know your staging date – the date you need to comply with the new Automatic Enrolment regulations.
Plan Ahead – it can take up to 12 months in advance of your staging date to be fully prepared for implementation.
Choose the pension (and provider) that is right for your business. If you already have a pension scheme, make sure it qualifies for auto enrolment.
Don’t Panic get in touch with Janice, she is an expert in this field and is an Associate member of the Pensions Management Institute.