Workplace Pensions
The government has introduced auto enrolment/ workplace pensions to help more people save for their future. This means that employers will need to automatically enrol some workers into a workplace pensions plan, whilst giving others the option to join a pension.
The employer duties started being introduced in stages from October 2012. The date that an employer’s duties first apply is known as their staging date and it’s based on the number of people in their largest Pay As you Earn (PAYE) scheme on 1st April 2012.
Employers will need to assess their workforce to determine whether they’re treated as a ‘worker’. There are three different categories of worker which are determined by their age and how much they earn.
The employer duties will depend on the types of worker they employ. They will need to automatically enrol some workers into a pension scheme and arrange membership for others. Employers are also responsible for the ongoing maintenance of the scheme and have an obligation to keep certain records.
An employer must register that they have an auto enrolment scheme in place with The Pensions Regulator by at least five months after their staging date. The employer will also have to re-register every three years. The good news is, if an employer has an existing pension scheme, they can use this to meet their duties as long as it meets certain criteria. The bad news is that a large proportion of existing employer pension schemes do not meet the criteria to be a qualifying scheme. If an employer has not already checked to see if their existing pension scheme is qualifying then they should take advice to get this checked out immediately.
The employer duties are not optional. The pension’s regulator will be responsible for ensuring that employers comply with their duties. Although The Pensions Regulator approach will be to educate and encourage compliance, employers will face substantial fines or even imprisonment if they do not comply.
As a chartered firm of independent financial advisers we are able to help to guide employers through this minefield. We are based in Chippenham, Wiltshire, but we work with employers nationwide, and are happy to talk to any business in any location of the UK.
Integrity Pensions and Investments. Sutton Benger, Chippenham, Wiltshire.