Is it really necessary?
- Auto enrolment was introduced decades ago by nations such as Denmark, Switzerland and Holland – the UK is 35, even 40 years behind.
- It is a legal requirement – there are significant fines for those who don’t comply.
Who does it apply to?
- It applies to all employers – from one employee upwards.
- Employers are given a staging date – the date by which the pension must be ready to start. It is possible to postpone the staging date (max 3 months).
- All employees must receive a letter from their employer about the new pension arrangement.
- Employees aged between 22 and state retirement age, earning £10,000 per year or more must be automatically enrolled.
- Employees outside the age range or with earnings below £10,000 are not automatically enrolled, but must be offered the opportunity of joining the pension scheme.
- Contributions to the pension are made monthly, with both employer and employee starting contributions at a minimum 1% of annual salary.
- In future contributions will increase – up to 4% for the employer and 5% for the employee.
- There is an opt-out option for employees – but the employer cannot be involved with this.
- Employers have certain duties – regular reporting, record keeping and the on-going monitoring and maintenance of the pension scheme.
- A range of pension providers and solutions are available – for which research is essential.
- Professional help tailored to employers’ needs is readily available from Albert Goodman.
If you require any further information regarding Auto enrolment and Workplace Pensions please contact:
Andy Hopper at Albert Goodman – 01823 286096