Harnett Accountants in Twickenham talk the new Workplace Pensions Cost

Harnett Accountants in Twickenham are here to tell you that a compulsory pension scheme for all employees is to be introduced over four years from October 2012.

The largest employers (120,000 or more employees) will be forced to sign up first. Those who employ less than 50 workers will be required to take part in the scheme from a date sometime in 2014 to 2016, depending on their PAYE reference number. Only one-man companies, workers aged under 22, over state retirement age or those paid less than £7,475 will be exempt from the scheme. If employees want to opt out they have to make an active decision to do so and sign a form. The employer will not be permitted to induce employees to opt out, or to screen out potential employees who do not wish to opt out of the pension scheme.

Employers and employees will be required to make contributions to the pension scheme totalling 8% of the workers earnings, including tax relief given on the employees’ contributions. The employer must contribute at least 3% of the workers’ earnings. This level of compulsory contributions will be imposed gradually over five years to 2017.

Employers can still use an existing pension scheme, set up a new one, or use the new low cost Government pension scheme, NEST (National Employment Savings Trust). If using an existing scheme the employer will have to certify that it meets all the requirements of the compulsory pension saving scheme and register with the pensions regulator.

Harnett Accountants in Twickenham advice that you talk to your pension scheme provider to prepare for these new regulations, alternatively, we offer a free hour no obligation consultation. You can also follow us on Twitter, Facebook, Google+ or through our blog for more financial/industry updates.


Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

No comments yet.

Leave a Reply