If you are an employer and have any staff that you pay on a PAYE basis, you will have to set up a company pension scheme and both you and your staff members will have to contribute to their pension.
All the costs of setting up the pension and running it have to be paid by the employer, along with the company contribution made into the employee's pension.
The new legislation came into effect in October 2012 and is being phased in – with the largest employers having been first to have to set up their pension scheme. In the current year (April 2014 to April 2015) those companies with between 50 to 250 staff will have to set up their Auto Enrolment Pension.
Those with fewer than 50 employees will be given “Staging Dates” (their starting dates) between 2015 and 2017. An employer has no choice about this and there are significant penalties for failure to set up the pension scheme and to ensure it runs properly.
Those companies large enough to have dedicated accounts staff will find that the procedure can usually be linked to the existing PAYE process but there is still quite a bit that will have to be done by the employer – including choosing the pension provider they will use and establishing the required procedures and communications to staff. Where there is already an existing company pension scheme, it will have to be reviewed to see if it can be used as it is, or whether modifications will have to be made. It is estimated that an employer should begin dealing with the Auto-Enrolment process 6 to 12 months before the Staging Date, which is when the pension has to be up and running.
We will be offering an advisory service for employers with up to 50 staff. Contact us for details.
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