A recent auto-enrolment update from the Department of Work and Pensions (DWP) has predicted that by 2020, £17bn a year will have been put into workplace pension schemes as a result of auto-enrolment.
It also predicted that just over 10 million workers will be saving more money than they would have done previously, even outside of the workplace schemes.
The Government are urging employees to put aside as much as they can during employment, so they have a better chance of enjoying a comfortable retirement when they finish working.
But whilst it’s clear that the scheme has huge benefits, employers need to be doing their bit to make sure that they ready for pension auto-enrolment.
What is auto-enrolment?
Before auto-enrolment, many workers were either not enrolled on a pension scheme or were not offered a pension by the employer which saw them missing out on valuable pension benefits. Under the automatic enrolment scheme, employers must automatically enrol eligible employees into a pension scheme or face penalties. The employer also has to pay into the scheme.
Companies who employ at least one person over 22 and earning at least £10,000 per year, will need to pay into a pension pot on their behalf. If there is already a pension scheme in place that meets with current government standards, then this may be sufficient. When a company enrols an employee into a pension scheme, they will need to be able to provide information including their age, sex, name, automatic enrolment date and address.
If employers do not comply with the rules, they will be issued with a notice – and the fine for that notice increases with every day that passes. If the company employs fewer than 4 people then it increases by £50 a day, but if there are between 5 and 49 employees it increases by £500 a day.
Is your business auto-enrolment ready? HR Solutions can help
Automatic enrolment is being phased in, starting with the largest employers in the UK. Employees need to be enrolled into a scheme by 1 February 2018, at the latest.
The auto-enrolment scheme may be automatic for your staff, but you will still need to make sure that you are meeting all your obligations as the employer. But don’t worry, Pension Auto Enrolment. You will need to choose the pension provider you wish to use and then we can put the process in place for you.
We will help your business by providing:
• Automated assessment of employees
• Automated data and payments to pension providers
• Automated employee communications
If you are an employer, the message from all the advertising is simple, don’t ignore the workplace pension. Auto-enrolment is coming and you will be risky a hefty fine if you are found not to comply. So HR Solutions with HR Solutions and find out more about how we can help you get your company set up with a workplace pension.