This year will bring some fundamental changes to workplace pensions as all employers are obliged to meet the legal requirements for automatic enrolment (AE). Your existing arrangements might already meet these provisions but if they don’t you really need to start planning now. The changes will bring challenges in terms of compliance and administration as well as cost.
These changes can seem daunting, or might not even feature on your priority list just yet, which is where B&CE can help. It’s important to have a strategy in place early and they can give you all the information you need to understand your AE requirements to help ensure you comply with the new legislation.
The Pensions Act 2008 establishes new duties for UK employers from October 2012. The changes are being introduced to address the estimated 7 million people* within the UK who are currently under-saving for their retirement. These duties require you, as an employer to:
• Provide all of your workers with access to a workplace pension scheme.
• Automatically enrol certain workers into a pension scheme and pay contributions on their behalf.
The duties are being introduced over a period of time based on an employer’s largest PAYE scheme as at April 2012. Smaller companies will follow over the next four years. This is known as your staging date and is when the legal duties initially affect you and oblige you to enrol some or all of your workers into a qualifying pension scheme. Employers with the largest numbers of workers in their PAYE schemes will have the earliest staging dates. The Pensions Regulator (tPR) will write to you around 12 months before your staging date. Below is a summary of staging dates by employer size.
Employer size Staging date
120,000+ 1 October 2012
50,000 – 119,999 1 November 2012
30,000 – 49,999 1 January 2013
20,000 – 29,999 1 February 2013
10,000 – 19,999 1 March 2013
6,000 – 9,999 1 April 2013
4,100 – 5,999 May 2013
4,000 – 4,099 1 June 2013
3,000 – 3,999 1 July 2013
2,000 – 2,999 1 August 2013
1,250 – 1,999 September 2013
800 – 1,249 1 October 2013
500 – 799 1 November 2013
350 – 499 1 January 2014
250 – 349 1 February 2014
50 – 249 1 April 2014 – 1 April 2015
Test tranche for < 30 June 2015
30-49 1 August 2015 to 1 October 2015
Less than 30 1 January 2016 to 1 April 2017
Employers without PAYE schemes 1 April 2017
New employers (PAYE income first payable between 1 April 2012 and 30 September 2017) 1 May 2017 to 1 February 2018
New employers from 1 October 2017 Immediately
Correct as at January 2012, further details to follow.
* Source: www.dwp.gov.uk/newsroom/press-releases/2012/jan-2012/dwp010-12.shtml
Find out more about the changes and your obligations as an employer and how B&CE can help by visiting www.thepeoplespension.co.uk
