Following the recent legislative changes concerning pensions, employers now have new responsibilities that include providing their workers with a workplace pension scheme and contributing towards it where necessary. This is something every employer will have to consider, even if the firm only has one employee. Employers may choose to provide a workplace pension either as part of their contract of employment (contractual enrolment), or through an auto-enrolment process.
There are certain criteria that all employees have to meet to be eligible for auto-enrolment. If they don’t, then as an employer you are not legally bound to set up a Workplace Pension for them.
Employees must be enrolled if they are:
- Classed as a ‘worker’
- Aged between 22 and State Pension age
- Earn at least £10,000 per year
- Normally work in the UK
You will also need to categorize your workforce and identify any workers where you have to provide access to a workplace pension scheme but might not have to pay employer contributions.
Naturally, there are some caveats to these rules, here are some of the more common exceptions:
- Employers do not have to auto-enrol their one employee if the employee is an office holder who does not have a contract of employment
- Auto-enrolment does not concern those employees that have already been contractually enrolled into a qualifying workplace pension scheme
- There may be occasions where an employee does not earn over the £10,000 threshold in a year, but triggers the requirement to be auto-enrolled due to spikes in their monthly or weekly pay
For some, the new Workplace Pension means business as usual as they are have already been running their own workplace pension, though they will need to ensure that it is suitable for auto-enrolment. For others, it means a steep learning curve as they begin setting up their new pension scheme from scratch.
No matter which of these two camps you fall into you’ll want the same thing – value for money for both for your business and your employees. You’ll also want your pension scheme to run smoothly so you can concentrate on your company rather than sorting out pension problems.
This is why at LEBC our Workplace Pension Consultants don’t just help you set up the right pension for you and your employees, they can also be there to assist you in running it. As every business has different needs, they’ll give as little or as much help as needed. So, whether you just need guidance on setting up your workplace pension all the way through to running it for you, you can have peace of mind that you’re in safe hands.
Please remember, no news or research item is a recommendation or advice to buy. LEBC Group Ltd is not responsible for accuracy and may not share the author’s views. If you are unsure of the suitability of any investment or product for your circumstances please contact an adviser. The Financial Conduct Authority does not regulate tax planning.
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