The Government brought about changes to pensions in order to make it easier for people to join a pension scheme. Legislation was brought in to allow people in jobs to be enrolled automatically.
Companies with employees will need to ensure that they comply with auto enrolment for pension. This basically requires employers to ensure that all employees are automatically enrolled in a pension scheme (an employee may subsequently opt out of the pension scheme).
The Pension Regulator have identified staging dates (each employer can check their specific staging date by using their PAYE reference), and companies not adhering to the timescales may be subject to fines.
There are possibly exemptions from auto enrolment:
- There is only one sole director
- There are a number of directors but either none or only one has an employment contract
- If employees earn less than £10,000 (if they earn between £5,824 – £10,000 the employee can ask to be opted in to pension scheme, and employer has to oblige)
The minimum contributions have been set as follows:
<30-09-2017 : Employer = 1% and Employee = 1%
>01-10-2017 <30-09-2018 : Employer = 2% and Employee = 3%
>01-10-2018 : Employer = 3% and Employee = 5%
Contact us to find out whether auto enrolment is compulsory for your business or not.