Options for employers
Pension reform is having an impact on every employer in the UK. In addition to ensuring you have a complaint pension scheme, the cost of automatically enrolling employees into a qualifying scheme can be significant. It is therefore essential to understand how the new legislation will affect your company and the cost impact it will have on your organisation.
It’s important to note there isn’t an obligation for an employer to use the National Employment Savings Trust (NEST) pension scheme. However, there is an obligation to automatically enrol your employees in a compliant scheme.
Your company doesn’t necessarily need to make use of NEST
You might already have an existing company pension which will meet your obligations as an employer
NEST has some limitations which may make it unsuitable for some employees within your organisation
The NEST scheme will be made available to all employers and as such this will prove an attractive option to many. It is therefore essential to understand the implications of the new legislation, the increase in costs, when the rules need to be implemented and how to effectively manage them into your business plans.
Many employers already have a company pension in place and make substantial contributions towards the scheme – in which case the largest changes will involve communicating the changes to the workforce and administration. Some organisations have a good pension scheme, but few employees take up the offer, meaning they will need to carefully consider the cost implications.
For organisations without any pension scheme in place, the impact of the new legislation will be significant and careful consideration to the changes need to begin as soon as possible. One of the first steps is to establish who needs to be automatically enrolled, by what date and how much it is likely to cost the company. Early planning should be a priority.
All employers need to understand how the new pension reforms and in particular the staged phasing dates will affect their organisation. Some existing schemes will be “qualifying pensions” and more than meet the requirements, meaning that only small changes will be required in administration. However, those without a pension provision may have significant changes imposed upon them.
We have designed an employers guide to the new pension rules. Please compete the form to download your free copy, alternatively please contact us for further information or to speak to a workplace pension specialist.