Richard Kirk , chartered financial planner at the LEBC Group
MANY business owners and directors will remember the introduction of the requirement for employers to offer at least a stakeholder pension scheme for employees, however in many instances these became "shells" rather than effective pension schemes.
However, starting in 2012 there is a new piece of legislation affecting employers' duties in providing pensions to employees.
In summary, every UK worker over the age of 22 (up to state pension age) and earning more than £8,105 a year will be legally required to be enrolled in a pension scheme run by their employer.
The first "staging date" for auto-enrolment is in October for the very largest companies, with all employers required to meet the obligations during a defined period at a time specific to them.
Small to medium-sized employers' staging dates will start from spring 2013. Full "staging date" details are available on the Pensions Regulator website. Qualifying workplace pension schemes must meet certain minimum contribution criteria and, for the employees that opt out, a system must be put in place by the employer to re-enrol those individuals every three years.
The new legislation will therefore carry huge responsibility for advanced planning and preparation, as employers get ready to react.
This includes the formation of strategies to reduce knock-on effects, such as additional administration workloads, and planning to reduce the challenges that may be created for HR and payroll.