Workplace pensions law is changing and every employer must act.
From 2012 changes to pensions law will affect every employer in the UK; these changes will help more people save for retirement. Every employer must comply with the law; this will mean new duties for the payroll administrator.
The changes mean that as an employer you must automatically enrol certain members of your workforce into a pension scheme and make a contribution towards the pension fund. The scheme must be a scheme suitable for automatic enrolment, and it must meet certain minimum qualifying standards.
A new pension scheme, NEST (National Employment Savings Trust) has been established, it is available to any employer who chooses to use it. This will enable all employers to provide a pension scheme for their workers using NEST or, where the scheme meets the necessary requirements, their own scheme or another pension provider.
Payroll administrators will be able to assist employers in meeting the obligation to ensure that certain members of the employer’s workforce are automatically enrolled into a suitable pension scheme and make sure that (employer and employee) contributions are paid to the scheme in respect of those members.
The Pensions Regulator is the UK regulator of work-based pensions. It has been running a campaign with industry representatives over the past few months to increase awareness of the automatic enrolment duties amongst employers and their advisers.
HMRC and The Pensions Regulator are working together to ensure that employers are properly supported in complying with the new duties. HMRC’s role in the process is assisting employers to register new schemes when they decide to enrol their workforce into an alternative qualifying registered pension scheme.
If you are an employer you must understand your obligations in respect of the automatic enrolment duties and be aware of The Pensions Regulator’s role in maximising compliance with those obligations.
The new duties are being introduced over four years, starting with the UK’s largest companies in 2012; other employers will follow in 2013 to 2016.
We will make further updates known as they become available.