Auto-enrolment has succeeded in raising the profile of pensions savings and whereas we welcome measures which reduce the savings-gap this has inevitably placed a further burden on employers who now have to provide a qualifying workplace pension scheme for their employees.
The following is provided for information purposes only and we recommend that professional independent advice is taken prior to making any decisions or taking any action with your pension.
The law on the new employer duties and safeguards commenced in July 2012. Each employer is allocated a date from when the new duties will apply to them, known as their ‘staging date’. The staging dates start from October 2012. Finding out their staging date should be an employer’s first step in getting ready for the new duties.
One of these duties places new requirements on employers to automatically enrol certain workers into a pension scheme. There are other duties as well as automatic enrolment, including the provision of certain information to their workforce
It is each employer’s responsibility to identify their staging date and to work out when they must act to be ready for the new duties
The next step for an employer is to take an initial view of their workforce, to determine what preparations they will need to make before their staging date.
If an employer already provides a pension scheme to some or all of their staff, they have a number of options, including:
1/ using their existing scheme for automatic enrolment (provided it meets the automatic enrolment and qualifying criteria). An employer may want to discuss any necessary amendments to the scheme rules, and the process for making them, with the trustees, managers or provider of the scheme
2/ using their existing scheme as a qualifying scheme for existing members (provided it meets the qualifying criteria), and setting up an alternative scheme to fulfil their automatic enrolment duties
3/ setting up an alternative pension scheme to fulfil their automatic enrolment duties for all their eligible jobholders
When choosing their scheme to fulfil their duties, an employer might use an existing scheme or set up a new occupational or personal pension scheme.
There are a number of important factors to consider when establishing a new scheme and Argent Wealth have been very active in this arena, ensuring that a new offering is both beneficial to the employer in terms of administrative assistance and overall costs as well as the employees in terms of contributions and benefits.
We have assisted many employers through the detail and requirements since the introduction of auto-enrolment and are always happy for initial discussions to illustrate how we can help.