A In 2012 the government introduced a law requiring employers to enrol workers into a pension scheme and to make contributions to that scheme on the worker’s behalf. The employer’s contribution, which starts at one per cent of the worker’s salary, will increase over time to three per cent by 2018.
A Large companies are already required to comply, and the law is gradually being rolled out for smaller employers according to their size, with the smallest having to comply in 2018. Companies can find out their auto-enrolment date by visiting www.thepensionsregulator.gov.uk/ employers/tools/staging-date.aspx
A Full-time and part-time UK workers are eligible if they:
A Employers face penalties ranging from warnings from the Pensions Regulator to daily fines of up to £10,000. There are a number of areas of potential danger. For example an employer must be very careful not to take any action that encourages a worker to opt out, and must provide information to its workforce at certain stages.
A Larger employers may already operate pension schemes that they are now using for auto- enrolment purposes. For smaller employers, the government’s NEST scheme is a popular choice. Careful planning around auto-enrolment is essential.
The above is a general overview and we recommend that independent legal advice is sought for your specific concerns.
Andrew Benson is an associate in the pensions team at Charles Russell LLP, firstname.lastname@example.org