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Government confirmation - Employers must provide pensions

Government confirmation - Employers must provide pensions
Tuesday, 26 October 2010 23:00

The government has confirmed that all employees must be offered the opportunity to join a workplace pension scheme. This will apply to businesses of all sizes.

The announcement is a confirmation of many of the provisions of the Pensions Act 2008 and finally provides some clarity for UK businesses through a period of changing legislation and government.

The proposed start date of April 2012 stands.

One of the new provisions is Employers with fewer than 50 members of staff can, if they wish, use a state-sponsored scheme - the National Employment Savings Trust (Nest) - rather than establish a workplace pension scheme of their own.

The Pensions Minister, Steve Webb, commented  "The National Employment Savings Trust (Nest) will be the new low-cost pension scheme that will be the vehicle for saving for millions.

"For the first time, employers will have to make pension contributions for eligible workers from 2012, ending decades of decline of membership in workplace pension schemes."

As a result of the changes it is expected that, 4-8 million employees will for the first time contribute to their pensions.

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