8th February 2010

INFORMATION
UPDATE

 Issue No.  2010/07

 Sentient
              

 

  PROPOSED PENSION CHANGES

The Government has unveiled the final set of Regulations for workplace pension reform aimed at securing better pension provision for the ageing workforce.

 

The Regulations are complex and technical. Implementation is to be phased in over a three year period, based on size of organisation, commencing 1st October 2012.

 

The Regulations impose a two fold duty on Employers:

 

The first duty is to offer a Qualifying (work-based pension) Scheme into which ‘Qualifying Employees’ must be automatically enrolled (provided they are not already in a suitable scheme). 

 

The second duty is to make a minimum contribution.  This will gradually rise through the transitional period but by October 2017 the minimum contribution by an Employer will be 3% (the Qualifying Jobholder will need to contribute 4% with an additional 1% coming from the Government in the form of tax relief, giving a total of 8%) of Qualified Earnings.

 

A qualifying workplace pension scheme must be either an employer sponsored pension arrangement that satisfies specified quality tests or the personal accounts scheme. The personal accounts scheme is to be called NEST – the National Employment Savings Trust.

 

Non-compliance could result in: compliance notices and unpaid contribution notices, fixed penalties (of £500) and, if the breach is not remedied, escalating penalties of between £50 and £10,000 per day depending on the number of employees within the organisation.  In the case of repeated and serious non-compliance there may be criminal sanctions.

 

Whilst you may think implementation is some time away, you should nevertheless start thinking, planning or at the very least budgeting ahead for the additional cost, not only in pension contributions but also the cost of the administration of the Scheme.  

 

Employers should seek professional advice from their existing pension providers or there are a range of organisations that are able to assist with facilitating Pension provisions such as Banks, Insurance Companies, Brokers and Independent Financial Advisors – and we suggest that you only obtain advice from those organisations / individuals that are registered with the FSA (Financial Services Authority). 

 

Further and more detailed information can be obtained from:

http://www.dwp.gov.uk/policy/pensions-reform/latest-news/

 


 

 

Sentient

Employment Law
Health & Safety
Personnel / HR
Food Safety
Food Hygiene
Management Training

Sentient


Sentient

Making sense of it all

Sentient - Training


Sentient adj ...

"capable of perception"

"capable of independent thought"

Please contact us at info@sentientuk.co.uk or call UK 08456 446006

To subscribe for these E-mails click here or to access our archive of previous E-mail Updates please click here.   Click here for details of our services available on our website. 

The advice and comment in this update is not meant to be an authoritative statement of law. The articles and summaries should not be applied to any specific set of facts and circumstances without seeking further advice. Whilst every care is taken to ensure that the content is correct Sentient cannot accept responsibility for the accuracy of statements made nor the result of any actions taken by individuals after reading such.

To unsubscribe to this information newsletter please click here and complete the unsubscribe form on our site.
Warning do not click this link unless you wish to be removed from this update newsletter.