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How will the new pension changes affect my business

The current plans for pensions reform consist of a package of changes to both state and private pensions. The aim is to get more people to save more for their retirement.
Some of the detail has yet to be finalised but it’s clear that pensions reform will completely change the face of the pensions industry in the UK and will begin in October 2012.

What are my responsibilities?

 
Employers’ will have new responsibilities under pensions reform which are built on two principles:
    •     the auto-enrolment of working individuals into a pension scheme, and
    •     compulsory pension contributions for both employee and employer
As an employer, you can choose to auto-enrol employees into a qualifying auto-enrolment private pension scheme or into the National Employment Savings Trust (NEST).
 
The total minimum pension contribution that needs to be paid into a scheme is 8% of qualifying earnings, with the employer needing to contribute at least 3%. Qualifying earnings is different from how most employers currently calculate pensionable earnings so it is important to be aware of the impact and possible solutions.
 
I already provide a scheme for my employees- is that sufficient?
 
Your current scheme must meet certain qualifying criteria. A Financial Options will be able to advise you on whether it is or not and also review your current scheme to see if it is suitable in terms of performance and cost.
 
What happens if I don’t take any action?
 
The Pensions Regulator will impose penalties if the correct pension provision is not in place.
What is the next step?
 
We are experienced in providing the most appropriate advice and will give you all the information and tools you need to start preparing and we’ll keep you up to date on all developments as and when they happen. These changes will have a huge impact on a business’ finances so it is important to receive the correct information in order to plan for the pension reforms. Even if you have existing pension provision in place it is important to review this to make sure that it will conform to the new changes.