Under a law introduced in 2012, all employers must offer a workplace pension scheme and automatically enrol eligible workers into it. This requirement has been in place for larger employers since October 2012 and will apply to all employers by 2018. This change in legislation passes on several more responsibilities to you, the employer.
Our software has been developed to include extra functionality that will determine the status of each employee, calculate pension contributions, where necessary, upload the information to your pension provider and issue statutory communications. Please contact us now to discuss implementing your Workplace Pension.
To help more people to start saving for their retirement the Government has made major changes to how workplace pensions operate. Until now, it has been up to individual workers to decide whether they want to join their employer’s pension scheme. But by 2018 all employers will have automatically enrolled their eligible workers in to a pension scheme – unless the worker opts out.
Your staging date – the date from which you need to enrol eligible workers – can be found on The Pensions Regulator website by entering your PAYE reference number.
As a result, many more people will be able to build up savings for their retirement.
Whether an employee works full time or part time, you will have to enrol them in a workplace pension scheme if they:
• are not already in a suitable workplace pension scheme
• are at least 22 years old but under State pension age
• earn more than £10,000 a year (tax year 2015-16) and
• work in the UK
Employees have the option of opting out from the scheme but, if they do, they will lose out on receiving your employer’s contribution as well as the Government’s contribution in the form of tax relief. If the employee opts out within a month they will receive a refund of their contributions.
The minimum total amount that has to be contributed by the employee, employer and the Government is currently set at 2%; 0.8% from the employee, 1% from the employer and 0.2% as tax relief.
These minimum contributions are increasing from October 2017;
• October 2017 to September 2018: 5% of earnings; 2.4% from the employee, 2% from the employer and 0.6% as tax relief
• From October 2018 onwards: 8% of earnings; 4% from the employee, 3% from the employer and 1% as tax relief