11 Jun 2012

Clarification for Employers on the Plans for Automatic Enrolment Pensions

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Research recently undertaken by Jelf Employee Benefits has found that 44% of employers have not made any plans to meet their legal obligation to automatically enrol certain members of their workforces into appropriate pension schemes and, as the employer, to make contributions into the schemes on behalf of the employees. For those who provide a pension to their teams already, it is possible that some new obligations will have to be met.

At first sight, and in light of the fact that the scheme will begin to come into force on 1 October 2012, it appears that there is considerable complacency amongst UK employers. MCM’s advice, however, is not to panic as there is a lot of scaremongering amongst the media particularly because the introduction of the scheme is being phased over an extended period of time.

Only the largest employers (those employing over 4,000) will be required to auto-enrol over the next 12 months. If you employ between 250 and 500, you will not be involved until the beginning of 2014.

Employers with less than 250 people do not yet have a firm implementation schedule but the Government is proposing that they will start participating at some time between 2014 and 2017. It is important to emphasise that these dates are still under consultation and so have not been finalised. Indeed, it is believed in some quarters that the smaller employers will not be involved at all.

So, for the majority or organisations, there is still plenty of time to make plans and to explain to their employees what they are going to do and what benefits the new pension arrangements will offer. Full details of how the scheme will work as well as the planned and proposed implementation schedules can be found on the Pensions Regulator website which can be accessed by clicking here .

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