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Workplace pensions are inevitable like death and taxes. All employers, have been assigned a staging date based on their size, from October 2012, when they are required to enrol eligible employees into a workplace pension.
It is likely then that your business or employer has either reached its staging-post or will shortly do so.
Employers will be required to pay into these pension arrangements, but the amount will depend on the approved pension scheme adopted. Under a defined pension scheme, the contribution will be a minimum of 2% of the employees’ qualifying earnings, which calculation takes into account the employer's and employee’s contribution and tax relief. These percentages will increase over time.
Once they have reached their staging date, employers must advise their employees in writing as to whether they are being enrolled, and on what date, the details of the pension being introduced (including the employer and employee contributions being made) and how they might opt out. They must also enrol their scheme with the pension regulator.
Payment into pension schemes that are registered with Her Majesty's Revenue and Customs has significant tax advantages for both employers and employees. Pension schemes are also a way of attracting and retaining employees. However, they can be subject to disputes, as the recent cases involving allegations of indirect discrimination which have occurred in the past few years have shown; the majority of which had been brought by part-time workers. Therefore, before setting up a pension scheme, it is important to seek legal advice to ensure you comply with the relevant regulations.
Our employment solicitors can provide you with all the advice and information you need to set up a pension scheme for your employees or in regard to a dispute regarding pensions. We can also keep you up-to-date with the latest developments surrounding the law of pensions, to ensure you have the information you need to run your pension scheme effectively, or to assess one that has been offered.