From October this year new laws will require employers to automatically enrol eligible "jobholders" in a pension scheme. Eligible jobholders are aged between 16 and 74, normally work in the UK under a contract of employment and are paid qualifying earnings – the level of which will be reviewed annually.
Employers will be able to use an existing occupational pension scheme or personal pension scheme if it meets the requirements, but if not, they will have to enrol employees in NEST, a central scheme to be set up by the government. Implementation will be staged by number of employees and span about four years from 1 October 2012, although already there are delays – in November 2011 the Department for Work and Pensions announced that the implementation date for employers with less than 50 staff was being reviewed. Enrolment is automatic but jobholders will be free to opt out of either type of scheme once they have joined. While employees are active members of the scheme, employers will be required to pay a minimum level of pension contributions on their behalf.
For information about any aspect of employment law, contact Reggie Lloyd on 01206 217347 or email reggie.lloyd@birkettlong.co.uk.
