Pension Auto Enrolment, Workplace Pensions and Pension Compulsion
New legislation has introduced Pension Compulsion and this is an extremely complex issue.
Morgans are specialist pension and employee benefit advisers and can provide you with detailed information regarding an employer's obligations in respect of Auto Enrolment and Workplace Pensions. Please contact us now to discuss your situation in greater depth.
- At present, employers with five or more employees must provide a Stakeholder pension scheme. However, there is no compulsion for either the employer or the employees to actually make pension contributions to it.
- With effect from 1st October 2012, Pension Compulsion arrives, whereby both employers and employees must start making pension contributions.
- Pension Compulsion will be phased in over several years, based on the number of employees, so that by 2018 all employers and employees will be effected by the compulsion process. The table below indicates when employers will have to commence auto enrolment:
|Number of Employees||Auto-Enrolment Obligations Commence|
|120,000 or more||October 2012|
|10,000-49,999||Jan/ Feb/ Mar 2013|
|2,000-9,999||April, May, June, July, Aug 2013|
|250-1,999||Sept, Oct, Nov 2013 & Jan, Feb 2014|
|50 to 249||April 2014|
|Less than 30||Jan 2016 to Nov 2017|
- The actual contribution levels by both employer and employee will themselves be phased in, starting at a low level and increasing over time.
- Employers providing Group Personal Pension schemes and Group Stakeholder Pension schemes with contributions to the required level will be deemed qualifying.
- All other employers can either establish a qualifying company sponsored pension scheme or subscribe to the new Government pension vehicle to be known as the National Employers Savings Trust, NEST.
- NEST is intended to be a simple vehicle that will only permit pension contributions to a certain level, will have a narrow choice of investments and will not provide advice to individuals.