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Why staff pensions matter

  • Blog
  • 10 December 2015

Since October 2012, employers have been required to enrol all eligible employees into business pensions. The Workplace Pension scheme means that each enrolled employee can save as they earn. They make contributions to their pension, added to by their employer and topped up with a contribution from the Government in the form of tax relief.

Why staff pensions matter

Companies have been phased into the scheme gradually over a period of six years. This ends in 2018, and an estimated 11 million eligible workers are affected. Workers who are eligible for automatic enrolment include those who are over 22 years of age; do not already have qualifying company pension schemes; and are earning over a specified amount per year.

One of the principal drivers behind the Government's introduction of auto-enrolment is that people are simply not saving enough to have the income that they will require in retirement. As the ratio between workers and pensioners continues to narrow, it has become even more important that today's working population makes appropriate contributions to company pensions which they can draw upon when they retire.

Since enrolling employees into a workplace pension plan is now a legal requirement, you will need to pay attention to the date by which you are required to comply, and make sure that you have allowed sufficient time to prepare. Employers who fail to comply on time may be penalised. However, there is plenty of guidance and assistance on hand from The Pensions Regulator as to how to make sure that you are ready.