You may have already been approached by some of your staff who have seen the recent ‘We’re All In’ TV adverts from the Department of Work and Pensions for the roll-out of the new Government Pension Auto Enrolment Scheme.
The Government has introduced the new scheme simply because we’re all living a lot longer than we used to and therefore the State cannot afford to fund the growing number of Retirees. This is coupled with the fact that the number of people saving in workplace pension schemes has now dropped to its lowest level since records began almost 60 years ago!
Any eligible Employee who is 22 or over, and who earns more than £10,000 a year, will be automatically enrolled in their company’s pension scheme. A minimum of 1% of their salary will go into this pension every year (rising to at least 5% by 2018).Other workers may also have to have the opportunity to join the scheme – the rules are fairly complex!
As an Employer you now have a legal obligation under the new legislation to set up a pension scheme for all eligible jobholders and the company to contribute to the scheme. Contributions will be a minimum 1% of the Employee’s gross salary to start with, rising to 3% by 2018. The Government will contribute the tax the employee would have paid on their contribution.
The legislation is not optional and requires your company to put in place certain procedures and record keeping duties. Failure to do so in the required timescales will incur penalties. Your timescale is governed by your staging date – please contact us if you are unaware of how to find this date.
One of the main issues in setting up a compliant scheme involves your payroll electronically communicating with your chosen pension provider. At Continuum we have already ensured that our payroll software is fully AE compliant, so this is something that we can facilitate for you.
In order to provide you with the very best advice, we have joined forces with a specialist Auto Enrolment partner. They are able to provide straightforward and good value advice in order to make your business Auto Enrolment compliant. Once your scheme is set up, we can take over from there if your current payroll is unable to meet the compliance criteria.
If you would like to contact us regarding this new arrangement, together we will run through the new legislation and outline your various options and responsibilities. On completion of a short fact find you will be provided with a concise recommendation report which should be retained for compliance purposes.
As each company’s staging date gets nearer, the need for professional advice also increases. We therefore consider it wise to be set up and ready for Auto Enrolment as soon as possible. You do not need to start making any contributions before your staging date, but you can (currently!) still take your time with options and set up to ensure you are ready.
Please do contact us if you require further information or to arrange an initial meeting to discuss. In the New Year, Continuum will be holding workshops at our offices for local companies who would like to find out more. If this might be of interest to you, please contact us to ensure you are on our mailing list when the dates are finalised.