Starting from October 2012, employers will have to enrol workers into a workplace pension if they meet the criteria. Employers will have to enrol the following employees if they:
- are not already in a pension at work
- are aged 22 or over
- are under State Pension age
- earn more than £8,105.00 a year
- work in the UK
When employers have to commence auto-enrolment depends on the size of their organisation. Very large employers are doing it first. Employers with between 50 and 249 employees have until between April 2014 and April 2015 to implement the reforms, while smaller firms will have to introduce auto-enrolment between June 2015 and April 2017.
Under the new scheme, a slice of a worker’s pay packet will automatically be diverted to a pension pot. At first this will only amount to a minimum of 0.8% of their pensionable earnings. Their employer will, by law, be obliged to add the equivalent of 1% of their employee’s earnings to the pot. Eventually, these minimum contributions will rise to 4% from the employee and 3% from their employer.
If you would like any further information on this topic please feel free to contact the team on 01733 371180.