The
London Olympics has finally come and gone. Pension auto enrolment follows hot
on its heels and comes into force on 1 October 2012.
The
date by which employers must comply
with the auto enrolment regulations is called the ‘staging date’. Staging dates
are being phased in over the next 5½ years. The largest employers are leading
the way with a staging date of 1 October 2012, followed by medium-sized
employers and finally small and micro employers.
All
‘eligible jobholders’ must be auto
enrolled no later than 3 months after the staging date.
Why auto enrolment?
The
government is on a mission to make sure employees have access to a workplace
pension. However, unlike Stakeholder pensions, employer pension contributions will be compulsory under this new
legislation, which is designed to encourage a retirement savings culture in the
UK.
Fines
The
government has introduced a scale of
fines for employers who fail to meet
their staging dates, or fail to comply with their auto enrolment obligations.
Dependent upon the size of employer and extent of non-compliance, these fines
could be as much as £10,000 a day.
Furthermore,
whilst employees will be permitted to ‘opt out’ of auto enrolment, there will
also be heavy fines for employers found guilty of inducing employees to ‘opt
out’.
So
it is clear to see that the government means business this time and is fully
committed to seeing auto enrolment become a success.
The Workforce
As
well as identifying your ‘eligible jobholders’, you will also need to identify
your ‘non-eligible jobholders’ and ‘entitled workers’. All three categories of
worker will need to be informed of their different pension rights.
Non-eligible
jobholders and entitled workers will have to be continually monitored to make
sure they are auto enrolled as and when they become eligible jobholders...
To read more visit http://www.wardwilliams.co.uk/documents/Pension_Law_Reform.pdf
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