What are the new forthcoming Employer Duties?
October 2012 will see the introduction of major pension reforms which affect every employer in the UK.
The UK population is living longer, growing and most importantly from a government perspective, not saving enough for retirement. To address this, the government is seeking to increase the level of retirement saving through the workplace. Starting from October 2012 and phased over a four year period, starting with the largest employers. New regulations will require every employer, regardless of size, not only to automatically enrol the vast majority of their workforce into a pension scheme, but also to make contributions on their behalf.
Employers will be able to choose the type of scheme to enrol their staff into, provided it meets certain criteria. In general terms, it will either be a:-
- Defined Benefit (DB) scheme
- Hybrid scheme
- Defined Contribution (DC) scheme, including NEST (the National Employment Savings Trust).
To comply with the new requirements, minimum standards must be met.
- DB schemes - there must be a minimum level of benefit payable.
- DC schemes - minimum contribution level must be met
- Hybrid schemes will have to meet the DB and/or DC requirements, depending on the scheme.
Please note all information relating to work place reforms and auto enrolment are based on our current understanding of legislation and is subject to change prior to Royal Asset expected in the summer of 2011.
For more information, please review our website or contact our Financial Services Department on 01473 408422 or ifa@wmibl.co.uk
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