Auto enrolment is a new law that was recently brought in by the government stating that every employer is required to automatically enrol all of their workers into a workplace pension scheme if they fulfil certain criteria. These criteria include:
- Being aged between 22 and state pension age
- Earning more than £9,440 a year
- Working within the UK
If you are an employee who already has a workplace pension scheme then you may not see any difference in that scheme and it will most likely carry on as normal. If you are an employer and you do not make contributions to your employees pensions or if they do not have a pension setup then by law you will have to automatically enrol all workers.
How it Will Affect My Business?
When the new law came into effect in October 2012 it heralded one of the most significant changes to pensions in a number of years. Almost all businesses will be affected by this change, with the most significant changes being in the property and construction industries due to their historical lack of pension arrangements in the workplace. All businesses need to adhere to these new regulations and if they choose to ignore them will suffer severely financially. Your company’s individual staging date will be determined by the Pensions Regulator and will be based on the size of your organisation and your PAYE number. For example those organisations with over 120,000 staff will have begun government staging on 1 October 2012; whereas those organisations with fewer than 30 staff will not begin their staging until between 1 June 2015 and 1 April 2017.
What Are My New Duties?
As an employer you will have to automatically enrol all of your eligible employers and then make a minimum contribution to their pension. In order to be eligible for automatic enrolment your employers need to be aged between 22 and state pension age, earn more than £9,440 a year and work in the UK. If your employee is aged between 16 and 21 or aged between the state pension age and 75 then it is not necessary to auto-enrol them, however they are allowed to ask to be involved. In order to prepare for this change and be ready for your staging date it is important that you take any long-term operational plans, financial projections and cash flow into consideration.
A Simple Solution
If you are a small organisation, or you feel that this is something that you may not be able to do yourself then it is important that you seek further advice from financial organisations such as Berkeley Hamilton who will be happy to help you with any information that you require and advise you on how they can help you ensure you are prepared for your staging date and that you successfully roll-out auto enrolment throughout your company. So what are you waiting for? Now is the time to make sure your company is prepared for auto enrolment.
Image Attributed to FreeDigtalPhotos.net stockimages