DID YOU KNOW…

IMPORTANT NOTICE TO EMPLOYERS ABOUT EMPLOYEES PENSION SCHEMES ….

Auto enrolment for pensions
I am starting to prepare clients for the Auto Enrolment for pensions being introduced later this year. All employers need to be aware of this and with even one employee aged 22 or over earning over £8,105 per annum (in 2012/13), a pension needs to be made available, and any existing scheme needs to be confirmed as meeting the new rules. I met one client last week who has a small Limited Company and employs his wife as a Company secretary, he was shocked to discover that even this falls into the auto enrolment for pensions requirements.

Auto Summary of the Auto Enrolment for pensions requirements
Employers will be required to enrol most employees (known as jobholders) into a pension scheme and make contributions to it. The pension scheme must meet certain minimum requirements so that it is a Qualifying Workplace Pension Scheme (QWPS). The date from which employers will need to do this varies from employer to employer and is called the ‘staging date’. The earliest staging date is October 2012 and employers can find out their staging date from The Pension Regulator’s website: www.tpr.gov.uk/pensionsreform 

A QWPS employer pension arrangement will be one that satisfies specified quality tests.

Auto enrolment for pensions will have a major impact on employers, particularly for those with no current provision, or current low pension membership participation rates.

Auto Enrolment for pensions – the basics
All employers will have to automatically enrol employees who are:

 Aged between 22 and State Pension Age
 Earning more than the ‘earnings trigger’ (£8,105 in 2012/13) and
 Not currently in a qualifying pension scheme.

A ‘qualifying pension scheme’ can be a personal pension scheme or an occupational pension scheme (as long as it meets the prescribed requirements). Employees of all employers, irrespective of size, must be auto enrolled. Employers will be able to delay auto enrolment of new employees for up to three months from the date they join service.

Opting Out of Auto Enrolment for Pensions
Employees will be able to opt out of their employer’s scheme during the designated one month opt out period from their automatic enrolment date, if they choose not to participate. They will also be entitled to a refund of any contributions they have paid following automatic enrolment. Employees who opt out have to be re auto enrolled every three years and they can on each occasion decide to opt out. If an employee wishes to rejoin the scheme having previously opted out, then the employer must allow this at least every year.

For further information or to arrange a complimentary review please contact David Johnson Financial Planning Ltd on 01452 621160.