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Are you Aware of the Changes in Pension Regulations for Employers in 2012?

Background

The Pensions Act (2008) proposes a new national pension scheme known as Personal Accounts to be launched in October 2012. 

The Rules

  • Employers must auto-enrol all jobholders in a pension scheme if they earn more than £5,035
  • The scheme must have contributions from both employer and employee from age 22
  • A contribution of 8% band earnings must be paid with the employer paying at least 3%
  • It will be every employer’s responsibility to ensure that they comply with the new rules, or face fines of up to £50,000 per breach
  • Every employer who does not already offer a Qualifying Workplace Pension Scheme (QWPS) must do so

Implications for Employers

  • Potentially large and sudden increase in scheme membership and subsequent impact on cash flow
  • Daily administration burden and cost in order to meet the above rules
  • Daily calculation and deductions of contributions
  • Must not provide information to staff on whether or not they should join
  • Employers who offer an existing ‘quality’ scheme can opt-out of most of the new rules

As an Employer, Questions to ask Yourself

  • Are you aware of the proposed new legislation? Is your current adviser up to speed?
  • Does your current scheme meet the new rules?
  • How many additional eligible staff will need to be auto-enrolled?
  • How much will this cost you in monthly pension contributions?
  • Will you be able to communicate with all your staff before the launch date?
  • Are your administration systems able to cope with the daily requirements?

How can JWPCreers Wealth Management Help you with this?

  • Plan in advance to help minimise costs to your business
  • Explain in plain English what the new rules are
  • Help you to understand the specific implication for your business and staff
  • Design a plan to ensure the pension scheme complies with the new rules by 2012
  • Communicate with your employees and advise them individually where required
  • Keep up to date with further changes to legislation

If you wish to discuss how we can help you, we will be happy to arrange a free initial consultation.

Please contact Julie Routledge DipPFS, JWPCreers Wealth Management Limited, Foss Place, Foss Islands Road, York, YO31 7UJ. Telephone 01904 717260 or email jroutledge@londonyork.co.uk

 

Registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales.