Auto Enrolment Pensions
If you employ people it is now the law to provide your employees with a company pension scheme. Don’t worry this sounds scarier than it is.
We are able to set up your pension scheme, provide all the information for you to give to your employees and maintain and administer the scheme each month. If we are providing you with payroll services then this can all be done at source.
Please see below for more detailed information on auto-enrolment:
Every qualifying business in the UK has to now offer a company pension scheme to their employees. Businesses should by now have received their staging dates from HMRC detailing when they are required to have their scheme in place by. For automatic enrolment, employees fall in to three categories, dependent on their age and salary level.
Please the table below detailing these categories:
Eligible jobholders will be automatically enrolled in to their employer’s pension scheme. If they choose to remain in the scheme. they will benefit from contributions to their pension from their employer as well as their own contributions.
Non-eligible jobholders will not be automatically enrolled in to their employer’s pension scheme but can ask to join. If they opt to join the scheme, they will benefit from contributions by their employer just like eligible jobholders.
Entitled workers will not be automatically enrolled but can apply to join. However for this category the employer is not obliged to contribute to the employee’s pension.
Once automatically enrolled in the company pension scheme the employee has a period of one month to opt out should they wish to. Any contributions paid in this first month will be refunded to them. After one month the employee cannot opt out of the scheme but can cease making their contributions at any time.
It goes without saying but employers must not advise employees regarding their pension options.
What are the minimum auto enrolment contribution rates?
As you can see from the table above the contributions from both employees and employers are due to significantly rise over the next few years.
If you are unsure if you are in need of a pension scheme for your employees or have any questions please get in touch and we can go through things with you and help with the admin side of things if required.