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The biggest shake-up of pensions for a generation has begun and millions of workers will be pushed into saving for their retirement for the first time.


On 1st October 2012 pension auto-enrolment began for employers with 120,000 or more employees, with smaller employers joining in stages.  Employers with fewer than 30 employees will auto-enrol from June 2015-April 2017, and new employers who started PAYE schemes on or after 1 April 2012 will auto-enrol from May 2017-February 2018.  The Pensions Regulator sends employers full information 12 months before their staging date and again at three months before.


Every eligible jobholder, including those on temporary contracts, will have to be automatically enrolled in the National Employment Savings Trust (NEST) and both employer and employee pay at least 1% of the worker's salary into NEST unless they explicitly opt out or are a member of the employer's qualifying pension scheme.  Employers who already provide an occupational pension scheme will need to find out whether it is a qualifying scheme.  


For all employers, advice may be needed on contractual issues, such as whether other employee benefits will need to be reduced in order to cover the costs of the organisation's pension contributions, or how to respond if employees start demanding higher pay to cover the cost of their contributions. Employers will also need to ensure their payroll software is compatible with the pension requirements.


For more information go to Sandy Adirondack’s excellent legal update website:

employee pension auto-enrolment