The biggest change to the pension system is now well underway and it is the responsibility of each employer to ensure they comply with the new regulations. As an employer, you must enrol eligible employees into a qualifying pension scheme and you will also be required to contribute up to 3% of each employee’s eligible earnings which means that the scheme will have an effect on your business and costs.
The employer must make all the arrangements for the eligible employees to be included in a qualifying scheme and to deduct contributions accordingly from the individual’s pay. The employee can choose to opt-out of the scheme if they wish but this can only be via communication between the employee and the pension provider, the employer can have no bearing on the employees’ decision whatsoever.
To avoid a ‘big-bang’ launch, the scheme is being gradually introduced. The Pensions Regulator will write to all employers approximately 12 months before their staging date so that the employer knows when to automatically enrol their eligible jobholders into a qualifying pension scheme or the Government run NEST pension scheme. It is extremely important that these letters are not ignored. On the off chance you do not receive a letter you still need to make enquiries.
It is important to note that even if an employer already operates a pension scheme, the scheme must be checked to ensure it complies with the new legislation and that arrangements are made to ensure that all eligible employees are automatically enrolled.
An employer who does not comply with the legislation will be subject to an investigation and fixed fines of £400 and also the possibility of daily fines ranging from £50 up to £10,000.
We strongly advise you not to delay arranging Auto Enrolment – Workplace Pensions. Start making plans today.
The team at BKL Wealth Management are on hand to assist. Their service is designed to provide you with in-depth information to enable you to understand how you can manage your current pension scheme or set up a qualifying pension scheme in the lead up to Auto-enrolment.
For more information or to arrange a meeting with one of their qualified advisers, they can be contacted on 020 8922 9365.
For The Pensions Regulator website click here.