Automatic Workplace Pensions

Under Statutory Instrument 2012/1506 (soon to be in force), for 2012/13 workers who earn above the income tax threshold (£8,105) will be automatically enrolled in workplace pensions. Employers will have to pay pensions contributions equal to at least eight per cent of those workers’ earnings between £5,564 and £42,475.

Automatic enrolment starts from October 2012. The automatic enrolment and re-enrolment “earnings trigger” is the level of earnings at which employers are obliged to automatically enrol (and re-enrol) eligible jobholders into a qualifying workplace pension scheme. The earnings trigger will be the same as the PAYE income tax personal allowance for the tax year 2012/13: £8,105. Employers are then obliged to pay contributions at least equal to eight per cent of a band of “qualifying earnings” made up of salary, wages, commission, bonuses, overtime and statutory sickness, maternity, paternity and adoption pay.

 

 

NICK BARNETT

Published on 13/08/2012

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