In October 2012, the Government introduced workplace pensions legislation which involved auto-enrolment. This is designed to ensure all employers enrol staff into a pension scheme and start funding contributions.
Unlike stakeholder pensions, auto-enrolment means workers initially have no choice other than to join a pension scheme and for both employers and employees to start paying into it. This added burden of expenditure needs to be carefully planned and business owners and financial directors need to be aware of the company’s future liabilities, especially in relation to wage negotiation.
The new auto-enrolment rule states that every company with one or more employees will be required by law to automatically enrol all eligible job holders into a workplace pension scheme and make an employer contribution towards it. Eligible jobholders are those aged between 22 and the state pension age (SPA) earning more than the minimum salary threshold, which will be £9,440 per annum in the 2013/2014 financial year.
The requirements for auto-enrolment come into effect at different staging dates between 2012 and 2017 dependent upon the number of employees on a company’s payroll.
The rules around the auto-enrolment pension’s initiative are complex and we suggest businesses start planning for auto-enrolment now and take advice sooner rather than later.
Gee 7 Wealth Management Limited has many years’ experience in providing pension benefits. But more importantly we believe that we are in a unique position within the market to provide a relatively low cost one to one engagement strategy with individual employees.
So whether enrolling your employees in the governments NEST default scheme or providing an alternative provider – enthusiastic communication to your staff of the positive benefits of such provision is at the very heart of our strategy.
Click here for information from the Department for Work & Pensions website (opens a PDF)