Work Place Pensions come into force today, 1st October 2012
This new law will eventually require all employers in the United Kingdom to automatically enrol eligible workers in a pension scheme. The new WorkPlace Pensions will be implemented in stages, starting from 1st October 2012 with the overall staging period running until 1st February 2018.
WorkPlace Pensions Obligations
Employers will be able to use an occupational pension scheme or a personal pension scheme provided it meets certain statutory requirements or if they wish, they can enrol eligible jobholders in NEST (National Employment Savings Trust) which is a central scheme set up by the government.
This requirement will apply to persons who are defined as an employee or worker who meet the following three conditions, namely that they work (or ordinarily work) under a contract in the UK, that they are between 16 and 75 and are paid qualifying earnings by an employer in a relevant pay reference period. In these cases the employer will be required to pay a minimum level of pension contributions.
The staging works in that all UK employers have been separated into a large number of bands according to their size, with each band being assigned a particular monthly "staging date" from which they will be obliged to start the enrolment processes. Large employers will become subject to the enrolment duties before small employers. There will be several open months to allow for delays or administrative issues.
Which band an employer falls within will depend on the number of workers in its PAYE scheme on 1 April 2012 (if it operates a single PAYE scheme). If an employer operates more than one PAYE scheme, its staging date will be determined by its largest PAYE scheme on 1 April 2012. The Pensions Regulator has published a staging date timeline to confirm the indicative staging dates that will apply for different sizes of employer, although the exact dates will depend on an employer's PAYE data. As a general guide, the position is as follows:
- More than 250 employees: staging dates between 1 October 2012 and 1 February 2014.
- Between 50 and 249 employees: staging dates between 1 April 2014 and 1 April 2015.
- Fewer than 50 employees: staging dates between 1 June 2015 and 1 April 2017.
- New employers set up between 1 April 2012 and 30 September 2017: staging dates between 1 May 2017 and 1 February 2018.
Several aspects of the staging regime mean the above dates can be varied in certain circumstances.
Employers will be required to automatically re-enrol eligible jobholders every three years after they first become subject to the statutory employer duties. This provision is designed to ensure that jobholders who have opted out on a previous occasion will need to reconsider their pension provision periodically
There are also consequences of a TUPE transfer, in that if an employer transfers some or all of its employees to a new employer under TUPE the transferring employees will be treated as working under a new contract and the new employer will need to make an assessment of their auto-enrolment status at the point of transfer.
For more informaiton on WorkPlace Pensions, contact employment solicitor, Susan Mayall, using the details below.Subscribe to our newsletter
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