28 June 2012

Auto-enrolment Pensions - Snippet #3

What if we have an existing pension scheme?
Employers with an existing pension scheme don't necessarily have to make any changes. BUT... the existing scheme does have to meet the auto-enrolment criteria (or be adapted to do that). This could apply to any occupational pension scheme, or personal pension plan, or stakeholder pension plan.

That means for example:
  • It must fit into the required processes and timescales for enrolling employees into the scheme
  • The employer must have an agreement with the pension provider to make contributions on behalf of the employee
  • Contributions must be at least 3% of qualifying earnings
  • There must also be an agreement between pension provider and employee to contribute the balance of the minimum 8% contributions
  • Contributions must be deducted by the employer from pay

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