The Pensions Act 2008

I know it's Friday and everyone is probably reaching out for their second or third glass of wine but I thought I would give you some food for thought in respect of the Pensions Act 2008.

The Pensions Act 2008, which is due to come into effect in October 2012, will for the first time place a legal duty on employers to enrol most employees into a pension scheme and contribute towards their retirement.

Employer must auto-enrol all employees into a Qualifying Workplace Pension Scheme (QWPS)

• Over 22 years but below state pension age
• Earning £7475 or more in 2011/12
• Within 3 months of commencing employment
• Employees can opt in earlier if they wish
• Employer & employee must jointly contribute a minimum of 8% of Qualifying Earnings into the scheme
• Employer must contribute at least 3%
• The employee can opt out within 30 days of enrolment, but the employer must not encourage or suggest this course
• The requirements including the minimum contributions will be phased in between October 2012 and October 2017

The move is aimed at getting workers saving for retirement.

Employers can take steps now to prepare for 2012’s pension reforms by:

• Deciding what type of pension provisions you will make for staff- personal accounts or an existing scheme?
• Look at existing pension schemes in order to establish whether they meet the requirements of the Pensions Act.
• You may want to look into whether your existing HR/ Accounting systems be able to cope with the changes?

If you have any questions/comments please feel free to contact me on 01133 504030 or 07841011980.