Automatic enrolment and employee benefits
As I’m sure you know, the law on workplace pensions has changed. In October 2012 it became a legal requirement for every UK employer to automatically enrol their staff into a workplace pension if they meet certain criteria.
It’s a situation caused by people living longer and not making adequate provision for their retirement. The new legislation aims to make it easier for millions of employees to build up a pension rather than rely on the State Pension which, at just over £7,700 a year*, is simply not enough for most people to live on.
Automatic enrolment means that qualifying staff, those aged 22 to State Pension age, who are working in the UK and earning over £10,000 a year, will be automatically enrolled into a pension scheme offered by their employer.
The scheme started in October 2012, and will take six years to implement with the timetable running to a close in February 2018. Sensibly, the programme is being phased in with an individual employer’s duties coming into force on what is known as their ‘staging date’, a date based on the size of their PAYE scheme on 1 April 2012.
If you’re an employer it could be a big thing: you may need to modify an existing pension scheme or even create one; you’ll have to make changes to your payroll so that it can handle the new requirements; put in systems to monitor the ages and earnings of your staff and you’ll have to write to your staff to let them know what’s happening.
One Financial Solutions is here to help you. We can help you find out your staging date and then help you plan and implement all the various steps to make sure you comply with the new legislation. For further advice or more information, please call one of the team.
* May 2014