NEST is going on the road to urge employers to find out how the imminent changes to workplace pensions will affect them and to allow plenty of time to prepare.
Five free roadshows, being held in locations in England, Scotland and Wales, will offer employers the chance to learn from NEST’s automatic enrolment experts about how they can prepare for pensions changes and find out how NEST can help.
For the UK’s large and medium sized employers, planning and implementing automatic enrolment can take up to 18 months. Employers need to get a clear picture of how the changes will affect their organisation, and how they can meet their duties as early as possible to ensure their implementation goes smoothly.
NEST is urging employers to find out their staging date and create a plan, involving organisations that they work with including payroll providers, advisers, HR systems providers and accountants, to ensure they’re ready for the changes.
Specialist sessions for advisers are also being held at the events. Experts will explain how NEST can be used to help advisers provides services to their clients, such as with the delegated access process.
Assistant Director of Distribution, Roy Porter said:
‘Starting in 10 days’ time, huge changes to workplace pension provision will affect virtually every UK employer. NEST is reaching out to employers with more than 250 workers across England, Scotland and Wales, to help them learn more about what steps they’ll need to take and how NEST could help.
‘We’re urging organisations to allow plenty of time to prepare for their employer duties, because there’s a lot to do – particularly for larger employers.
‘We’ll talk through planning and the processes that employers and their advisers might use to get ready for the changes. There’ll also be chance to speak to our pension experts and see how NEST’s scheme works in practice.’
Key facts about NEST:
• From October this year, the Government is introducing reforms that mean employers will have to enrol most of their workers into a workplace pension scheme that meets or exceeds certain standards. They’ll also need to make a minimum contribution for many of these workers.
• NEST is a national defined contribution workplace pension scheme available to all employers to use to meet their new duties. It’s designed around the needs of people who are largely new to pension saving, with clear communications, low charges and easy online tools and services. It’s run as a trust-based scheme, on a not-for-profit basis, and the Trustee has a legal duty to act in its members’ interests.
• NEST has a public service obligation to accept any employer (whatever their size) who wants to use the scheme to meet their duties, as a sole scheme or alongside other provision.
Automatic enrolment basics:
• Employers will need to automatically enrol workers aged at least 22 but under State Pension age who earn more than £8,105.[1]
• The total minimum contribution to each worker’s retirement savings pot will eventually have to equal 8 per cent of their ‘qualifying earnings’. Of this 8 per cent the employer will have to contribute a minimum of 3 per cent.
• Contribution levels will be phased in – starting at 2 per cent of a worker’s qualifying earnings. Of this, the employer needs to pay at least 1 per cent.
• The new duties affect the largest employers from October 2012, followed by medium-sized employers over the next couple of years. Small and micro-employers will be affected last. This process of gradually applying employer duties based on the size of the employer is known as staging.
