To help more people save for their retirement, the government has made major changes to how workplace pensions operate.
In the past it was up to workers to decide whether they wanted to join their employer’s pension scheme. But by 2018 all employers will have to automatically enrol their eligible workers into a workplace pension scheme. As a result, many more people will be able to build up savings to help cover their retirement needs. Automatic enrolment is being introduced in stages up until 2018. The largest employers started first, followed by medium-sized and then small employers.
Increases to Minimum Contributions
The total minimum contribution is currently set at 2% of your earnings (1% from the employee, 1% from the employer). From April 2018, it will increase as follows:
April 2018 to March 2019:
of your earnings
3% from the employee
2% from the employer
From April 2019 Onwards
of your earnings
5% from the employee
3% from the employer
How can 3D IFS help?
Our Workplace Pension Service, has been designed to accommodate employers of all sizes. By using fixed fees and clear stages of implementation, it allows employers to budget for the compulsory legislative changes.
We provide two service packages for employers, with clear and fixed costs at every stage. Our two service packages are as follows: Workplace Pension Lite Service and Workplace Pension Elite Service.
Within both services we offer a free initial meeting and free report designed specifically for your business. We aim to help decision makers and employees alike, producing a comprehensive, bespoke report along with a clear automatic enrolment strategy. A timeline will also create a clear and engaging employee communication, providing one-to-one meetings, pension workshops and a telephone pension helpline.
Should you wish to have any further information or advice regarding Automatic Enrolment, how it will affect your business and how we can help, please feel free to contact us.
Every three years you must put certain members of staff back into an automatic enrolment pension scheme. This is called ‘re-enrolment’. Re-enrolment duties must be completed approximately three years after your automatic enrolment staging date. You will also need to complete a re-declaration of compliance. Re-enrolment and the re-declaration of compliance are legal duties and if you don’t act you could be fined.
Secondary Auto Enrolment
The Secondary Auto Enrolment Market relates to a number of employers selecting to move their group pension scheme from the initial provider used for auto enrolment. It was always expected that as pension contributions increased up to 2018, group pension schemes may move between providers as higher contributions offered lower charge alternatives. Also, the ending of commission, the third-year anniversary for re-auto-enrolment and bad experiences with administration could be enough to push employers to switch scheme, and managing the workforce into retirement could become a driver in the longer term. This move of auto enrolment schemes between pension providers has evolved more quickly than many expected, driven by demand from employers with a bad experience in auto enrolment preparation / ongoing administration, unhappy employees or employers looking for a choice where time to their Staging Date had offered restricted options. A few questions a company may wish to consider:
Does our pension scheme have an annual management charge lower than the 0.75% government maximum charge – are we happy with this or do we require the lowest cost for our employees?
|Are our staff handling administration happy with the scheme arrangements and could these be more efficient?|
|Have any problems occurred with the pension provider or auto enrolment systems and were these handled satisfactorily?|
|How easy is it for members to obtain information online?|
|Does the pension scheme allow adviser charges to be paid so advice can be provided to a scheme member funded from their pension funds?|
|Did your charging structure change to remove an Active Member Discount?|
A lot of people were put in with the provider they were already with. Some previous advisers didn’t want to move because they were already getting commission payments, but it may be causing administration troubles now. If you are experiences problems or would like to make sure you are getting a good deal for you and your employees please get in touch.