Tuesday, 25 September 2012

AUTO-ENROLMENT into your pension schemes

From October 2012, employers will start to automatically enrol all staff into a “qualifying workplace pension scheme”.  This is being done incrementally, with the biggest employers affected first.  UNISON has produced a briefing at www.unison.org.uk/acrobat/14625.docx which explains what this involves, so please read it.  Publicity material and bargaining and organising guidance will be produced shortly, and the government has also started a publicity campaign.

Pensions auto-enrolment provides branches with a massive opportunity for recruitment and organising, especially in sectors where many workers are not in a scheme.  
The “at a glance” key points are as follows:

·         All employees paying income tax and aged between 22 and State Pension Age are affected.
·         From the 1 October 2012 the very largest employers will have to ensure that eligible staff are automatically enrolled into a qualifying workplace pension scheme
·         By February 2018 all employers should be operating pensions auto-enrolment  
·         Most forms of defined benefit pension schemes are qualifying schemes – as long as they are open to new recruits.  This includes the LGPS and NHSPS
·         Employers using a defined contribution pension scheme must pay “minimum contributions” - 1% for employers rising to 3% from October 2018.  Employees initially pay 1%, rising to least 5% (effectively 4% with tax relief applied) from October 2018
·         Staff will still be able to opt-out of the pension scheme should they wish to
·         Employers will have to automatically re-enrol eligible staff into a qualifying pension scheme at 3 yearly intervals
·         The Local Government and NHS Pension Schemes will remain the default qualifying schemes for staff potentially eligible to join them
·         Employers must register their qualifying schemes with the Pensions Regulator and inform staff of pensions auto-enrolment.  They must not encourage staff to opt-out or discriminate against staff who join a scheme (or those who decide not to).

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