Workplace pensions are the new normal and were introduced to help employees save for their retirement. As of 2012 the government has made it the law that all employers must provide a workplace pension scheme for all eligible employees. The roll-out of the staging process means that by April 2018 all employers must have a qualifying workplace pension scheme in place and automatically enrol their eligible employees.
How does a workplace pension work?
A workplace pension is designed to help employees save for their retirement and provide a lost-cost method of doing so. A portion of their qualifying salary is paid into the scheme every time they get paid, normally monthly but in some cases weekly. As their employer you will also have to contribute and the government contributes too in the form of tax-relief.
Equally there is a time tiering process for the contributions you and your employees have to pay in to the workplace pension.
By now it is likely most employers already have your workplace pension scheme set up. However it is still important to regularly assess the eligibility of employees and suitability of the scheme.
Assessing the suitability of your pension scheme
You may need help assessing the suitability of your current workplace pension scheme to make sure that it is still right for your company. You may need help assessing the eligibility of your employees. You may need help with your statement of compliance.
Therefore, employers should choose advisers who are suitably qualified to give them advice especially as employers are expected to re-assess these factors at regular intervals. For example, the age of your current workforce or contracts of employment may change over time which might have a direct impact on the suitability of the original workplace pension scheme chosen. Further, some workplace pension scheme providers are more efficient than others. If the scheme provider’s administration is poor it can lead to problems for the employer and employees.
Implementing a workplace pension scheme was only the first step employers needed to take. Businesses need to be mindful that they remain compliant with the law in order to avoid any penalties in the future. Furthermore, it is in theirs and their employees’ interests to invest in a suitable workplace pension plan. You may need help and advice on making these decisions so it is best to speak to someone who is independent.