In the UK we’re living longer and more active lives than ever before, but this means that we are spending longer in retirement than ever before too. When the state pension was introduced for over 70s in 1909, the average life expectancy was around 45 years old.
The Government has taken steps to encourage people to think about saving for retirement by introducing far reaching workplace pension reforms that make sure we all save for later life. The Pensions Act 2008 introduced new legislation to create a savings culture in the UK, requiring employers to enrol all eligible workers into a Qualifying Workplace Pension Scheme (QWPS). As an employer you need to establish a QWPS and this can be the current scheme you offer, or a new scheme via a specialist provider or insurer. This is known as Workplace Pension Reform or automatic enrolment.
What is auto enrolment?
Put simply, all employers must comply with the legal requirements for auto enrolment, which are to:
Provide ALL of your workers with access to a qualifying workplace pension scheme
Automatically enrol ELIGIBLE workers into a qualifying workplace pension scheme
Pay a minimum level of contributions
All this may sound daunting but Wren Sterling is here to help your business establish a QWPS and advise you on all aspects of workplace pensions.
Wren Sterling's default workplace pension solution: The Salvus Master Trust
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What is automatic re-enrolment?
Every three years as an employer you must put certain members of staff back into an automatic enrolment pension scheme. This is called ‘re-enrolment’.
You will also need to complete a re-declaration of compliance to tell The Pensions Regulator that you have completed your duties.
Re-enrolment and the re-declaration of compliance are legal duties and if you don’t act you could be fined by The Pensions Regulator.
There are many shared aspects of auto enrolment and re-enrolment, but one key difference is that postponement cannot be used in re-enrolment.
Who needs to be assessed?
You need to assess staff who have:
Asked to leave (opted out of) your pension scheme
Left your pension scheme after the end of the opt-out period
Stayed in your pension scheme – but chosen to reduce the level of pension contributions to below the minimum level, and who meet the age and earnings criteria to be re-enrolled.
Note, you won’t need to re-enrol anyone who has opted out of the pension scheme in the last 12 months, unless you choose to.