The changes that the Government is bringing in for pension legislation in the UK have been in the works for some considerable time, but it is in 2012 that these changes will become a legal requirement for all businesses – whether they employ a hundred people or just a couple. As they will involve businesses contributing more, both financially and in legislation terms, they have not exactly been met with universal enthusiasm – particularly by owners of small businesses which are struggling to cope with a lengthy recession – but it is nonetheless necessary for both employers and their workers to be aware of the changes and what they mean for them. Consider what companies like nowpensions.com can do to help you implement this.
At the core of the changes being brought in this year is something called an automatic enrolment pension which, as the name suggests, is something that employees will be put forward for rather than deciding themselves whether or not to sign up for a pension scheme. The intention is to get people saving for their retirement from an earlier age (as those eligible for an automatic enrolment pension will be any employee aged between 22 and the current pension age) but meeting the requirements of the scheme will impose additional burdens on businesses.
Firstly all businesses will be required to utilise the National Employment Savings Trust, which has been set up specifically for the purposes of the automatic enrolment pension scheme. If they already operate their own private pension scheme businesses must ensure that it meets the eligibility criteria for the scheme. Secondly they will be expected to make a financial contribution to the scheme alongside ensuring that all eligible employees are enrolled on it with the minimum amount that employers are expected to contribute being 3 percent, and the minimum of 8 percent required to be submitted to the scheme for each employee. Although they will be entered automatically for the scheme they have the option to withdraw from it within a month of being signed up, but it is illegal for employers to attempt to dissuade their employees from participating in the scheme.