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Pension Auto Enrolment and Workplace Pensions

 

Independent Financial Advisor from MorgansNew legislation has introduced Pension Auto Enrolment 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 who have not reached their Auto Enrolment "staging date" have no compulsion to make any pension contributions, nor do their employees.

  • With effect from 1st October 2012, Workplace Pensions arrives, under which all qualifying employees must be entered into a pension scheme. Pension contributions must thenbe made by both employers and employees. The employee has the right to opt out.

  • Auto enrolment 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 process. The table below indicates when employers will have to commence auto enrolment:

 

Number of EmployeesAuto-Enrolment Obligations Commence
120,000 or moreOctober 2012
50,000-119,999November 2012
10,000-49,999Jan/ Feb/ Mar 2013
2,000-9,999April, May, June, July, Aug 2013
250-1,999Sept, Oct, Nov 2013 & Jan, Feb 2014
50 to 249April 2014
Less than 30Jan 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 currently providing Group Personal Pensions Schemes and Group Stakeholder Pension schemes with contributions to the required level may arrange for these to be  qualifying schemes for the purposes of satisfying the requirements.

  • 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 although will have several restrictions.

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