More than one million employers have now enrolled their workers into a workplace pension scheme, The Pensions Regulator (TPR) has revealed.
TPR’s Darren Ryder said the success of automatic enrolment has led to 9.3 million people saving into a private pension.
The scheme, launched in 2012, requires employers to enrol workers into a company pension and match contributions coming out of the employee’s pay packet. By now the majority of employers should have met their staging date and have a suitable scheme in place.
From 6 April 2018, contributions for employers and employees have risen from one per cent of annual earnings to two per cent and three per cent respectively. The rates of contribution will rise again a year later so that employers must contribute three per cent and employees must put in five per cent.
Currently only employees who meet eligibility requirements – linked to pay and age – need to be enrolled, but employers should carefully monitor workers’ individual circumstances so they can be enrolled when the time comes.
Looking ahead the Government has also hinted that it may seek to lower the age limit from 22 down to 18, but this is yet to be consulted on. This could add additional complexity and costs to a company’s workplace pension scheme.
“By successfully meeting their responsibilities, employers have helped reverse the downward trend in workplace saving so that putting earnings into a pension has now become the norm,” said Mr Ryder.
“The continued support of the pensions industry, including pension and payroll providers and business advisers has been crucial to the success of automatic enrolment.  The industry has helped us ensure employers have the tools, information and services they need to comply with the law.
“We are now focused on the challenges ahead so that employers continue to understand what they need to do so that staff receive the pensions they are entitled to.”
Back in March, a bus company and its managing director were fined more than £60,000 after admitting trying to deliberately avoid giving their staff workplace pensions. TPR said the move shows the cost to employers failing to comply with automatic enrolment.
Failing to contribute the minimum amount into a workplace pension could lead to a large fine so it is important that you remain compliant. At Grunberg & Co we manage the workplace pension schemes for a variety of businesses, why not find out how we can help yours.