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Auto-Enrolment
 

Auto-Enrolment

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All you need to know about Auto Enrolment.

All you need to know about Auto Enrolment.

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    Auto-Enrolment Auto-Enrolment Presentation Transcript

    • What is auto-enrolment? The compulsory inclusion of all employees in a pension scheme with contributions also from the employer.
    • Why is auto-enrolment being introduced? • In 2001 stakeholder pensions were introduced to offer low-cost pension plans; membership of stakeholder pensions was voluntary and take-up was low. • Auto-enrolment is compulsory and aims to encourage saving for retirement. • Once in the scheme, members can opt out but the employer must put them back in again every three years.
    • Who must be auto-enrolled? Everybody. The only exemptions are employees earning less than £5,035 and employees under age 22 or over state pension rate.
    • When? The largest employers will auto-enrol first and it will be a gradual process until all employers are included. For an organisation with: • 5000 staff May 2013 • 500 staff November 2013 • 50 staff July 2014
    • How much? The contributions will be phased in: • 1% salary from the employer and 1% salary from the employee at outset • 2% employer and 3% employee from 2016 • 3% employer and 5% employee from 2017
    • How? Each employer will need to set up a pension scheme and include all staff in the scheme. Most employers will be setting up new group personal pension schemes to satisfy the requirements – Wentworth will help you with this.
    • What about corporation tax relief? The employer’s contribution should attract corporation tax relief as a business expense.
    • Will the members receive a tax break? Yes. The members receive basic rate tax relief (currently 20%) on their contributions. For example, the 5% member contribution payable from 2017 will actually cost the member 4% salary with HMRC paying 1% salary via tax relief.
    • Can we obtain independent pensions advice? Yes. Wentworth are on hand to provide continual impartial advice to the employer and the members about this new pensions regime. Please leave your details on our ‘Contact Us’ section and we will be in touch.