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Employee Benefits Advice for Corporate Clients

Automatic Enrolment & Workplace Pensions

 

From October 2012, the Government introduced new employer duties to help encourage more people to save for their retirement.

Auto-Enrolment is designed to remove the barriers to joining a pension scheme. This includes taking away the need for workers to make an active decision to join a scheme, ensuring more workers have adequate pension provision. Research also shows that complicated application forms may prevent employees from joining their workplace pension scheme. Auto-Enrolment will take away this burden for the member.

It is expected that it will take some employers more than one year to prepare the organisation for Auto-Enrolment as the legislation is extremely detailed and complex for the inexperienced. The regulations are clear in that it is an employer’s responsibility to manage and implement Auto-Enrolment for its workforce so it is vital to engage to right providers and allow sufficient time to prepare.

Employers who already have pension plans in place should not assume that what they have is fit for purpose. The government has introduced legislation around charges and remuneration that means a significant amount of legacy schemes need to be reviewed.

The advent of automatic enrolment has also meant that employers are reviewing how much they pay into pension plans as a way of retaining key employees.

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Investing involves risk and the value of investments and the income from them may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.