Pension Auto Enrolment, and its implications for businesses throughout the UK, is a hot topic for HR this year.
What is Pension Auto Enrolment?
The law on workplace pensions has changed, and companies now need to provide automatic pension schemes and contributions for their staff. Although it’s ‘automatic’ enrolment for your staff, it isn’t automatic for you. It will mean a lot of work for your business and HR staff, and you need to start planning NOW.
Who is eligible?
Every employer with at least one member of staff now has new duties, and subject to criteria, every member of staff will be enrolled into a workplace pension scheme with the employer contributing towards it.
So what makes an employee eligible? They have to be
- aged between 22 and state pension age
- earning at least £9440pa
- work in the UK.
When does it begin?
This compulsory workplace pension provision, to encourage saving for post employment, is being implemented in stages from 2012 to 2017. This started with businesses with over 250 employees from October 2012 and businesses with 50-249 employees in April 2014. The next phase is for businesses with 30-49 employees. If this includes you, it’s time to start thinking about it. You will be required to provide this provision from 1st August 2015. Smaller businesses have until January 2016 to come up to speed with the new regulations.
What are your next steps?
Visit the Government’s Pensions Regulator website for advice about the scheme, including the 7 key steps you need to follow.
You will need to declare your compliance, choose a provider (if you have no existing provision), implement software, and communicate with your staff.
If you do have an existing pension scheme, this may need amendments, so get advice from the providers.
This complicated and compulsory regulation will create an extra workload for you and your HR staff. If you require advice about how to manage this, or any other aspect of HR, talk to me today.