The introduction of Compulsory Workplace Pensions is the biggest change to pensions for a generation.
All employers, from their staging date, (speak to us to identify your staging date) will be required to automatically enrol individuals between age 22 and State Pension Age into a qualifying workplace pension scheme (auto-enrolment), and to pay contributions for anyone earning over the trigger point for paying Income Tax (£7,475 in 2011/12 tax year). The employer will have to pay some of the contribution, and could pay all of it.
Apart from the cost of paying the contributions, it is feared the biggest challenge employers will face is record keeping. The rules, which we understand will be strictly enforced, are complex and there are fines of up to £50,000 for failure to follow them. The Pensions Regulator has began the process of writing to employers warning that they are required to:
- Assess their workforce
- Identify who to automatically enrol
- Choose a pension scheme
- Register with the regulator
- Pay the correct pension contributions
- Process any opt-out notices
- Process opt-in or joining requests
- Avoid inducements and prohibited activity
- Keep accurate records
- Provide workers with information about the changes
All employers, whether they have existing pension arrangements or not, will need to consider very carefully how they are going to comply with the new regulations.
Perspective has developed a cost effective solution to assist employers do exactly that. Even if your staging date seems a long way off, changes in the Financial Services Industry at the end of 2012 may have a huge impact on the costs involved in providing workplace pensions.
Perspective advisers offer an audit of your current pension arrangements, and will provide you with a comprehensive written report enabling you to plan for this huge change in employer responsibilities.