Are you Aware of the Changes in Pension Regulations for Employers in 2012?
The Pensions Act (2008) proposes a new national pension scheme known as Personal Accounts to be launched in October 2012.
- 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 firstname.lastname@example.org