From 2012 for the biggest companies and 2016 for all existing employers, it will become compulsory for employers to pay into a pension scheme for almost all their employees (those over the age of 22).
You can join the Government pension scheme (NEST) or choose your own pension scheme.
All employees must be entered into the pension scheme within 3 months of starting employment. Employees will automatically be enrolled into the scheme, but can opt out if they wish.
The level of employer contributions will start at 1% eventually rising to 3% of employees mid band earnings by 2017.
- Using your own pension scheme allows you to outsource the admin responsibility
- Using your own pension scheme allows reduced National Insurance costs through salary exchange – not available through the government scheme
- If you have no existing pension scheme then you are obliged to implement the NEST Scheme which offers limited investment options, no transfers in or out of the scheme and a cap on total annual contributions
Blackstone Independent Financial Advisers will be able to advise the start date specific to your company and undertake an audit to project your costs, secure an appropriate Pension Provider and help you through the maze of legislation to ensure you implement your scheme on time and in line with the Pension Scheme Regulators requirements.
The earlier you start planning, the better chance of a remuneration strategy being in place to match your increased costs.
For more information on Auto Enrolment and its future implications, please contact us as we would be happy to help.