Julie Roche, Cert PFS, Cert CII(MP) Automatic Enrolment the employer duties and NEST
The information in this presentation does not constitute financial advice. Anson IFA Ltd is authorised and regulated by the Financial Services Authority. The seminar is based on our understanding of the rules and legislation, some of which is still in draft format and maybe subject to change. Whilst efforts have been made to ensure the accuracy, Anson IFA Ltd do not accept any responsibility or liability whatsoever in relation to the contents of the
The contract does not have to be in writing This may include agency workers All employees have the right to opt out of auto enrolment If they choose to opt out, after 3 years the auto enrolment process must be repeated There are a few exemptions, employer duties do not apply to these people: If the individual is the only person in a company Serving member of the naval, military or air forces of the Crown
Employers are required to base their minimum contributions for auto enrolment on qualifying earnings.
These are earnings between £5,035 and £33,540 and include
The lower limit each year will increase in line with the threshold at which National Insurance starts to be paid.
The upper limit will increase each year in line with average earnings.
Minimum Contributions? The rules require minimum contributions to pension schemes including a payment from the employer The minimum contribution from an employer is 3% The employee contribution will receive tax relief E.g. Employee pays 4% and tax relief of 1% will be added. 5% in total The total can be made up entirely by the employer or paid by a combination of employee and employer Minimum Contribution 8% Employee Pays 4% Tax Relief 1% You Pay 3%
NEST NEST National Employment Savings Trust Established by Government Employers can use NEST National Employment Savings Trust It is aimed at those who don’t have a good quality pension scheme Option to use it as an entry level scheme for a particular group of workers
Use recruitment practices that will benefit job applicants who indicate they are prepared to opt out.
Treat an employee unfairly or put them at a disadvantage because of auto enrolment.
Employers that fail to comply will be issued a fixed penalty of £400.
Followed by penalties from £50 - £10000
depending on the number of employees and scales of offence.
Case Study Sharon is 35 and earns £37,000 pa working as a Recruitment Consultant Sharon’s employer will be required to automatically enrol her into a workplace pension. Her employer will make a contribution of 3% of her earnings between £5035 and £33540. An annual contribution of £855 pa. Sharon will also make a contribution of 4% of band earnings. An annual contribution £1140 pa. She will receive tax relief (1%) £285 pa. Total contribution into her workplace pension will be £2280 pa.
Case Study Tom is aged 20 and is training to become an Electrician, he earns £15,000 pa Tom’s employer does not have to automatically enrol him. He can request to be enrolled. If he does his employer will have to make contributions to Tom’s pension.
Case Study Bob, an Accountant is 67, he earns £45,000 pa and is already a member of his company’s pension scheme Bob’s employer does not have to automatically enrol him. He is a non-eligible job holder. He can request to be enrolled. If he does his employer will have to make contributions to Bob’s pension.
Case Study Jan age 29 works in a private day nursery part time, she earns £75 per week Jan’s total yearly income is £3900 pa. This is below the threshold. Her employer will not have to automatically enrol her. She is an entitled worker. Jan can request her employer enrols her. If this was the case her employer would NOT have to pay any contribution, although they can if they wanted to.
We will work with your other professional advisers
We will provide support to help implement changes to your current
Enrol your employees
Help with communicating changes to all employees
We provide support to your employees in helping with the choices
Thank you Further information is available on request Contact: Julie Roche Cert PFS, Cert CII(MP) [email_address] Suite 26, Century Building Tower Street Brunswick Business Park Liverpool L3 4BJ 0151 707 8848