Duties For UK Auto Enrolment
According to the Pension Act 2008, every employer in the UK has to put certain staff members into a pension arrangement and then contribute towards the plan. This is called UK auto enrolment.
It doesn’t matter if you are a shopkeeper, a bondsman, an accountant or a barber, you have to contribute if you are an employer employing at least one person. These are your legal duties and you must abide by them.
The entity with which an employer works is called the Pensions Regulator in the UK. These folks will help you in setting up and administering your part in the entire pension scheme. They work with employers, trustees, business advisers and pension specialists by providing guidance and procedures about what is expected from employers.
The employer has a role in the management of a good pension scheme, and roles will vary depending upon the type of scheme for pensions that the employer and employee is involved with.
The employer must deduct funds from the employees pay and pay these funds and the employers contributions to the fund. If after the scheme is set up, and the employer is unsure what to pay, the pension scheme provider or trustees can be contacted.
The minimum amount that must be contributed to the fund is a total of 2%, with the employer contributing at least 1%. The funds must be paid by the 22nd of the following month if the enrollment is automated on the employer’s part, and by the 19th of the month if the payment is made by cheque.
Proper record must be kept by the employer as to what employees are participating in the pension scheme, their names, amounts being contributed and the dates.
The purpose for UK auto enrolment is because for a long time workers were just not saving enough money towards their retirement, and when people reached that time in their lives they have become dependent upon society for their well being. Since it is much better to save a little money along the way in order to have funds laid aside, this scheme was instituted.
People are living and the utility of such a program. People who are self-employed do not qualify, only workers who are employed by others.
The system is set up in order for eligible workers who desire to accumulate savings for retirement do not have to take any action themselves, as it is the responsibility of the employer to automatically enroll employees into the scheme that is administered through their workplace.
The overall plan is to have all workers enrolled in this pension scheme by October of 2018, which will go a long way towards providing financial security to workers when they reach their retirement years.
The plan to date has had enthusiastic support from all sides as the publicity has been received with a positive attitude. With kind of across-the-board support, employers are taking their responsibilities to heart to pay their share and keep appropriate records as required.