The government have introduced new legislation regarding workplace pensions. Every employer with at least 1 member of staff that qualifies within the criteria has duty to enroll them into a pension scheme and to contribute towards it. This change has come around due to the reducing ratio of workers to retirees. The aim is to have more retired workers in a positive financial position as not to become reliant on the state.
Which Workers are Eligible?
Employees who need to be enrolled will have to hit certain criteria, below details those:
- Not already a part of a qualifying pension scheme.
- Aged between 22 and state pension age.
- Earning over £10,000 per annum.
- Work is in the UK.
What Happens to Workers Outside this criteria?
For the people in the ‘Eligible’ category above it is a legal requirement to auto-enrol them. There will be a few people who don’t fall into this category and will be either ‘Non-eligible jobholders’ or ‘Entitled Workers’. These people also have the right join a pension scheme or opt in but this will not be done automatically. This means that your communication on auto-enrolment to your workforce has to be clear and managed well.
So what next?
Advice from the Pensions Regulator is guiding businesses to start planning 12 months out from their staging dates. As you engage with partners on auto-enrolment it’s important to realise that not all payrolls and companies are the same and so it’s very important that a tailored approach is adopted that fits in with your business’ needs and culture.
At CE Back Office we are offering a free consultation to discuss the impact of the changes to help you start planning today.