22 June 2012

Auto-enrolment Pensions - Snippet #1

Employers' New Responsibilities - A Summary
The biggest change to work-based pensions in a generation is rapidly coming down the line, and many employers (especially smaller ones) remain unprepared. Employers have been known to comment:

"Why didn't we know about this earlier?
We must get the rules changed!"

But it's too far along to change things now, so live with it!

I plan to blog a few key points in the near future to help towards understanding. For now, here's a few basic facts:
  • Employers will have to have a pension scheme in place
  • Processes will have to exist to make sure that employees are "auto-enrolled" into it
  • Employees can opt out, but they have to do so repeatedly - the Government's intention is to get people into pensions!
  • There are big penalties on employers for non-compliance - this is not another Stakeholder Pensions regime which you can just ignore!
  • Enrolment is being phased in from 2012 to 2018, based (mostly) on employer size, but recruitment is affected from July 2012
  • Employers must contribute a minimum of 3% of salary to each employee's plan
  • The Government are setting up a default pension scheme which will suit a few employers called "NEST"
  • Employers can have more than one scheme covering different classes of worker

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