Read our Pensions advice guides for employers, or contact us for further HR, Health & Safety and Employment law advice.
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What is a Workplace Pension?
FAQs
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Pay & benefits are what your employees receive for the work they do for your company.
The following are mandatory benefits employees must receive, retirement pay, holiday pay, maternity/paternity pay, and sick pay, as well as their salary.
There are other types of benefits you can give your employees, such as bonus schemes, company cars, employee expenses, and share schemes.
Peninsula can offer you expert advice on pay & benefits, ensuring you pay your staff correctly and avoid claims being raised against you.
Yes, if you don't pay your staff their legal entitlements claims can be raised against you. This could lead to financial damages being paid,
Pay inequality has been a prominent, ongoing issue in the UK economy for years. Not only through gender, but the government has recently found disparities within ethnic and disability demographics.
When it comes to paying staff, employers must ensure the right amounts are given – especially for those not on full-time contracts. Pro rata ensures these employees are compensated correctly; and that includes wages, holidays, and benefits.
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By 2018, all UK employers will be required by law to automatically enroll eligible members of staff into a workplace pension scheme. This is to prepare them for when they choose to from work.
The auto-enrolment system was initially introduced in October 2012 as a legal requirement for large organisations only, with smaller organisations phased into the scheme year on year.
It will eventually be the obligation of all employers to establish their own pension scheme or use the government scheme set up specifically for this purpose.
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Employers are required to enrol workers – both part-time and full-time – in a workplace pension scheme providing they meet the following criteria:
The employee works in the UK.
The employee earns more than £10,000 a year (tax year 2016-17)
The employee is not already in a suitable workplace pension scheme
The employee is at least 22 years old, but under State Pension age
Opting out
Although all eligible employees must be automatically enrolled whether they want to or not, individuals can then choose to ‘opt out’ of the scheme at any time. However, the employer must follow the same process again to automatically enrol these workers in a pension scheme three years later.
Categories and employer contribution
Employees are assigned a particular category depending on their age and level of income. This category then determines whether or not the employer has to contribute to the pension, and how much they are due to pay in. Employers must initially contribute a minimum of 1%, but this level will increase to 2% from April 2018 – March 2019 and then 3% thereafter.
The law behind pensions
The Pensions Act 2008 is the main legislation covering workplace pensions.
Summary
By 2018, all employers must automatically enrol their eligible employees in a workplace pension scheme.
Once automatically enrolled, employees then have the option to opt out if they wish, however they must be automatically re-enrolled once three years has passed.
Employer contribution is set at an initial 1%, rising to 3% as of April 2019.
Need help from Peninsula?
Peninsula offers expert advice on pensions. Our teams provide 24/7 HR advice which is available 365 days a year. We take care of everything when you work with our HR experts.
Want to find out more? Contact us on 0800 028 2420 and book a free consultation with an HR consultant today.
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