What are auto enrolment pensions? – In a nutshell

Published on 24th September 2013

Auto enrolment pensions – expert advice from Chris Dunston at Artavia PFS Ltd

Click here to view the transcript
The Government has introduced a new pension arrangement.
It’s designed to encourage a retirement savings culture in the UK and it’s called Auto-enrolment.

It applies to all UK employers, no matter how many people they employ.
If you’re an employer, and you haven’t yet done so, you will soon need to enrol your staff in a pension scheme and make employer pension contributions of at least three percent of their salaries.

Remember, a pension plan is simply a savings plan with tax relief incentives both now and when you come to draw funds from it when you retire. So it’s an important benefit for later life.

Here are the three key questions every employer should ask themselves:
Firstly, when do you need to launch your scheme. Secondly, who is eligible? And finally will you set up your own scheme with a known pension provider or the government scheme?
Lets deal with that all important date first.

If you visit the Pensions Regulators website and enter your P.A.Y.E employer reference number, and the number of employees you had at the first of April two thousand and twelve, you can find out the date to auto enrol your employees.
There is some flexibility here in that you will be able to defer this date by up to three months – or even bring it forward – to tie in with company accounting periods.

And now, lets look at who is eligible within your workforce.
In simplest terms you must enroll anyone aged twenty two or over and below State Pension Age, and, who is likely to have gross earnings of more than nine thousand, four hundred and forty pounds per year. But this will also depend on the level of contributions made and type of employee.

And finally where to place your company pension scheme. There are plenty of traditional market pension providers. You could investigate the government’s National Employment Savings Trust known as NEST, or even companies offering what is known as a middleware solution.
You may need to set up different schemes to suit the needs of your various employees. And there’s a formula for calculations that will be phased in from now, until two thousand and eighteen.

So yes – it’s complicated. And my advice is to seek help from a pensions expert.

Chris Dunston ACII APFS
Artavia PFS Ltd
[email protected]
01392 362362


Add your comment

Your email address will not be published.