Services: Pension Auto-enrolment and NEST Pensions advice

Pension auto-enrolment and NEST Pensions are due to arrive in the UK from October 2012. The latest idea of the UK Government, they will bring compulsion to pensions for the first time. With more pension legislation comes the need for the best pension advice. Here you can find some details of the new scheme, as well as an idea of how to find out more information and the options to address the issue.

The new pension auto-enrolment initiative is aimed at the estimated 10 million people in the UK who are not saving sufficiently for their retirement. The idea behind the pension auto-enrolment legislation is that employees and employers will be compelled to contribute to an employer pension scheme. If the employer does not have an existing pension scheme, or doesn't put a qualifying pension scheme in place, then contributions will be made to the National Emplyment Savings Trust scheme, or NEST.  

Employers will have to automatically enrol employees into a suitable pension, into which the employer will pay 3%, the employees will pay 4% and tax relief will add 1% of band earnings. Band earnings currently range from £5,715 to £38,185 (Nov 2012). In addition to basic salary "earnings" will include commission, bonuses and overtime. Employees will be able to opt out, but only after the first deduction has beenb processed - how this opt-out process is managed by each company will be vital.

As employers start to plan for this additional expense, taking on board how it will impact on their existing pension or employee benefits, receiving the best corporate pension advice is crucial. Does your pension meet the existing requirements? What choices will you have about pension autoenrolment and NEST pensions? As we approach 2012, these, and other questions will become more pressing.

TISCO operate a dedicated website to help employers with their pension auto-enrolment and nest pension obligations. Here you will be able to register for our regular e-newsletter or for your free Autoenrolment and Nest Pension Strategy Pack - a guide for employers.