United Kingdom

Auto-enrolment: The facts 

Transcript:

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VO 
Voiceover
GH Gurmukh Hayre
 
VO The pensions landscape is once again changing, and as key deadlines approach, UK business is having to adapt.  For many employers this will present an opportunity to rethink how they approach their pension provision and to check that their schemes are fit for purpose, from both the cost and benefit perspective. 

 

GH Pensions are constantly in the headlines for a variety of reasons. However, I wanted to highlight one important event which is going to change the pensions landscape and the employer/employee relationship indefinitely.  October 2012 will see a critical new responsibility being imposed on every single employer across the UK, which will apply to most of the employer’s workforce. 

 

All employers, starting with the largest and working through to the smallest, will have to auto-enrol their employees into a pension scheme and pay minimum levels of contributions.  The contribution payments will start at fairly modest levels of 1% from the company, and 1% from employees, but will then increase over the period between 2012 and 2017 to 3% from the company and 5% from employees. 

 

This will be a major change, not only for employers who already offer pensions, but much more dramatically for those that currently provide nothing.  The potential cost increase for employers, particularly if they have large number of non-pension employees, could be very high.  However, it’s not just the financial cost that’s the issue; the administrative burden of dealing of auto-enrolment through an HR, payroll, and IT point of view, plus the knock-on effects on the cost of pension administration also need to be addressed. 

 

This will clearly take time, and October 2012 is going to be upon in no time at all.  So planning, and thinking about the right approach now, is critical for all employers.

The pensions landscape is once again changing and as key deadlines approach UK business is having to adapt. 

 

Gurmukh Hayre gives an overview of the changes and the potential impacts for all UK businesses.

 

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