On top of State Pension and Private Pension Scheme employees can obtain savings for their retirement from Workplace Pensions.
AUTO ENROLMENT – OBLIGATIONS
A percentage of the pay is being put into a pension scheme automatically every payday, the employer adds a percentage under automatic enrolment to this amount and a tax relief is granted by the government.
According to the new law every employer must automatically enrol workers into a workplace pension scheme if they:
- are aged between 22 and State Pension age
- earn more than £10,000 a year
- work in the UK
Those that are out of the defined categories can still join the offered pension scheme the employer cannot refuse although they do not have to contribute if your pay is less than £486 per month/ £112 per week/ £448 per 4 weeks.
As an employer you will have obligations and limitations towards employees:
- have to pay at least the minimum contribution to the pension scheme on time
- have to let employees to opt-out (refund if under 1 month)
- have to let employees to rejoin at least once a year
- have to enrol employees back to the scheme every 3 years if they are still eligible
- cannot encourage or force employees to opt-out
- cannot unfairly dismiss or discriminate against employees if they stay in the scheme
- cannot imply anybody that they would get the job you offer if they would stayed out
- discontinue a workplace pension scheme without establishing a new one
- have to let employees know about their enrolment in writing
SETTING UP THE SCHEME
Unless you are a sole Director in your company or none of the Directors have employment contract or if you have at least one member of staff who is paid via PAYE auto-enrolment duties apply!
- Know your staging date! Careful planning is essential to fulfil your new duties
- Name your point of contacts by nominate your Primary contact (responsible person) and your Secondary contact (agent who manages the day-to-day tasks)
- Be sure you know who to enrol!
- Create the action plan and stick to it!
- Set the contribution levels and work out your costs
- Update employee data if necessary and check software compliance
- Chose a pension scheme and a good quality provider, if you already have a pension scheme set up check if it can be used for auto-enrolment
- Carry out the staff enrolment
- Don’t forget the Declaration of compliance which can be completed through Government Gateway
- Comply with day-to-day tasks and duties and maintain the auto-enrolment system.
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