The Government has set out a new timetable for companies to implement the automatic enrolment of staff into pension schemes.
The Government has confirmed a revised timetable for the introduction of automatic workplace pensions. And the new dates mean people working for companies with fewer than 30 staff will have to wait until at least 2016 to receive a pension from their employer.
The Government says the deadline, or ‘duty date’, for smaller companies has been pushed back due to the current economic climate. Another change is that companies employing fewer than 50 staff have now been split into two groups with two duty dates – one for those employing 30 to 49 staff and one for companies employing fewer than 30 workers.
Here are the current timescales for the introduction of workplace pensions:
|
Company size |
Duty dates for introducing workplace pensions |
|
250 or more employees |
From 1 October 2012 to 1 February 2014 |
|
50 to 249 employees |
From 1 April 2014 to 1 April 2015 |
|
30 to 49 employees |
From 1 August 2015 to 1 October 2015 |
|
Fewer than 30 employees |
From 1 January 2016 to 1 April 2017 |
Within these timescales, different companies will begin their schemes at different times, depending on the size of their workforce. For example, companies with more than 120,000 workers will have to begin enrolment from October this year, but companies with between 10,000 and 30,000 staff won’t have to start until March 2013.
[SPOTLIGHT]The changes mean that the deadline for employers to be paying the statutory minimum level of contributions – 3% of an employee’s salary – will come into effect three years later than planned.
The level of contributions will be phased in “to help employers and individuals adjust”. Employers will begin by paying in a minimum of 1% of qualifying earnings before rising to their contribution limit.
Employees will begin by paying a minimum of 1% of their qualifying earnings, rising to a minimum of 4%, plus 1% tax relief, by the 1st October 2018 deadline.
Each company has to offer either their own pension scheme or use the Government’s own National Employment Savings Trust (NEST).
Workers can, however, opt out of the scheme if they choose.
More: Where to get quality, free advice on your pension | How to use your ISA or property as a pension