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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.
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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.
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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.
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