In October 2012, the Government introduced workplace pension reforms known as auto enrolment. These will impact on every employer and they will need to prepare for these changes.
As a company director or business owner, it is your obligation to understand what a Qualifying Scheme is, what the process will be, how it will work, what duties you must comply with and, perhaps most importantly, when to take action.
You will ultimately be required to contribute a minimum of 3% of qualifying earnings between £5,824 and £43,000 for 2016/17 and your employee will have to contribute 4%, which, together with tax relief of 1%, will make a total of 8%. These amounts are being phased in over a six year period.
If you have an existing pension scheme, it may be that this can be used to meet your obligations. If it doesn't or you don't have a scheme in place, then you will need to decide how best to meet the requirements of the pension reforms. A proper strategy is essential as employers need to be mindful too of the requirements and restrictions of the Financial Services Act.
We can help you understand the issues and requirements of workplace pensions and offer guidance to ensure your business complies with the new rules.