The Act comes into force on 1st October 2012 and applies to all UK-based employers. There are various staging dates, according to how many qualifying staff are employed by a given organisation. See the staging table below:
The legislation includes agency workers in its definition of 'worker', including those on agency payroll, meaning that the agency will have to contribute for contractors working on their payroll. Umbrella employees also fall within the scope. Limited company contractors do not fall within the scope, however.Three more categories of workers have been identified:
The legislation clearly sets out the information and timeframes that employers and agencies will be required to give to their workers. Penalties can be applied for non-compliance.
We're being advised by leading legal firm Eversheds on implementing the new legislation thoroughly. We're also in discussions with our preferred enrolment provider NEST, as well as meeting our obligations set by TPR and DWP.
The government is taking steps to encourage people in work to make significant provisions for their retirement through The Pensions Act 2012, as most people have around 20 years of retirement to look forward to.
The minimum contribution rate is being phased in as follows:
Eligible jobholders - who'll need to be automatically enrolled into a qualifying scheme, with the ability to opt out. They must be at least 22 years old and below state pension age, work in the UK, and earn more than £8,105 a year.
Know your staging date
Non-eligible jobholders - who aren't eligible for auto enrolment but can opt in to a qualifying pension scheme if they choose. They must be at least 16 years old and below state pension age, and earning between £5,564 and £8,105 a year. You can earn more than £8,105 if you're between 16 and 22, or between state pension age and 75.
Identify who's responsible for auto-enrolling agency workers
Review your pension arrangement to make sure it's a qualifying scheme
Establish admin and payroll systems to deal with automatic and re-enrolment
Let all your workers know about the changes, including non-eligible jobholders and entitled workers. In particular, you need to inform eligible jobholders about the right to opt out, the start and end date of opt-out period, as well as information about the pension scheme and contribution rates.
Start contributing to the workers' pensions
Register with the Pensions Regulator
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