In response to the new legislation for Employee Pension schemes, which insist that employers must provide pension schemes for all their employees who earn over £7500, the Federation of Small Businesses (FSB) has partnered with Financial Advisers 'IFS' to provide an Auto Enrolment Service to employers and their employees. Underpinning the new service is the Scottish Widows Group Personal Pension along with a suite of additional technology which will allow small employers to comply with more confidence and minimise the additional administrative overheads.
This is the first time that a Group Personal Pension from a major product provider has been made available to employers with less than 5 employees and is enables small employers to access the same range of pension options which are available to larger employers in the run up to auto enrolment.
Other elements of the service (provided by IFS) include advice and support for employers in establishing and maintaining an AE compliant scheme on a cost effective basis. There is also telephony based guidance for employees helping them to make the appropriate decisions in respect of their retirement.
Sandy Harris, Chairman for FSB Members Services, explained; “Between 2012 and 2016 all employers will need to have registered a pension scheme and auto-enrolled all eligible staff into it, and also pay contributions into it.
“Even companies that have an existing workplace pension scheme may have to make changes so that it complies with the new legislation. This is going to hit the smaller businesses hard, but if they act now they will be able to choose a scheme that suits them, and phase in their contributions to make it more affordable.”
Employers can either use their own pension scheme to comply with these new rules or rely on the Government's default scheme, - the National Employment Savings Trust (NEST).
Employers will need to automatically enrol workers aged 22 or over who earn more than £7,475 into Nest or a similar pension scheme.
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