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The new ‘Employer Duties’ are planned to come into force from 1st October 2012.  Under these duties, employers will have to:
 

• Enrol Eligible Workers into a qualifying workplace pension arrangement;
   
• Choose the qualifying scheme(s) they adopt to discharge the newly arising duty; and either:-
    
  • Make a minimum 3% contribution towards a defined contribution scheme (based on qualifying pensionable earnings) or NEST (the National Employment Savings Trust); or
     
  • Offer membership of a defined benefit scheme or certain hybrid scheme which either has a contracting out statement or meets the test scheme standard.
     

An Eligible Worker is an employee aged between 22 and state pension age and earning above the income tax personal allowance (£7,475 in 2011/12).  It is proposed that contributions will become payable on earnings between the lower National Insurance threshold (£5,715 in 2010/11 and £38,185 for 2010/11).
 

Employers will also have an ongoing duty to maintain qualifying pension provision for workers who:-
 

• are already members of qualifying schemes; or
   
• become members of such schemes.
    

Employers can choose which scheme to use, provided it meets certain criteria.  It could be their own qualifying scheme, another arrangement or they may choose to enrol their staff into NEST (the National Employer Savings Trust).  Employers who do not have a pension scheme in place will need to select one.  There is no requirement for all employees to be enrolled in the same scheme.  Therefore an employer could elect to have two or more schemes if desired for different categories of employee e.g. managers and casual workers.
  

Woodward Markwell is qualified to explain all that you need to know about your employer duties.
 

To help you get a better understanding of the employer duties legislation please review our website or contact our Financial Services department on 01473 408422 or ifa@wmibl.co.uk
 

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