Workplace pension rules (AKA company pension rules)
By February 2018, all employers, whether a company or a small business, must offer a workplace pension (AKA company pension) scheme by law. If you haven’t already got your scheme in place, now is the time to start preparing.
There are many rules about what a company must and must not do. Here, we look at these in simple terms, to help you better understand what is required.
Workplace pension rules mean that an employer must automatically enrol members of staff into the company pension who:
- Are aged between 22 and state pension age
- Earn £10,000 a year or more*
- Work in the UK
These categories of worker are known as eligible jobholders.
* For the 2016-2017 tax year
Auto enrolment can be delayed for the first three months of employment, if the employer feels this is appropriate (to allow new staff to complete a probationary period, for example).
Anyone aged between 16-74, ordinarily working in the UK and have Qualifying Earnings in excess of the lower threshold but less than the Earnings Trigger; or between 16-21 and SPA and 74, ordinarily working in the UK and have Qualifying Earnings in excess of the Earnings Trigger are classed as non-eligible jobholders and are able to opt in to the Automatic Enrolment Scheme.
Anyone aged 16-74 who ordinarily works in the UK and who has earnings below the lower threshold for Qualifying Earnings is an entitled worker and can still be enrolled if they request it (their employer cannot refuse). This equates to £486 per month in the current tax year.
Likewise, employees have the chance to opt-out if they wish (they can enrol back in once every year if still eligible).
We at Certax Midlands are there for you to provide all the necessary advice, manage and maintain all your records as required by the law.
Acknowledgment: All information about workplace pension, responsibilities and obligations has been taken from www.workplacepensions.gov.uk