The law on workplace pensions has changed. Every employer with at least one member of staff has new duties – enrolling those who are eligible into a workplace pension and to contribute towards it. This is called Auto Enrolment.
Auto Enrolment has been introduced by the government so people save for a pension that will eventually top up the state pension.
In the past many employees missed out on a valuable pension because their employer didn’t offer them a pension, or they didn’t apply to join the company pension scheme. Auto Enrolment changes this. It makes it compulsory for employers to automatically enrol their eligible employees into a pension scheme. The employer must also contribute. This also means that employees will be offered a benefit that will hopefully translate to increased employee commitment/motivation and lower staff turnover.
Hefty fines apply to those who fail to comply with auto enrolment. Employers with more than 50 employees should already be up and running and for those businesses with less than 50 the staging dates are as follows:
- 40-49 employees 01/08/2015
- 30-39 employees 01/10/2015
- Less than 30 employees 01/04/2017
NOTE: Pension Auto Enrolment is fully implemented and this blog remains for information.