Pension Rule Changes
Are you aware of the proposed new pension rules coming into force from 2012?
If you are an employer and you haven’t, please spend a few minutes thinking about this.
From 2012, if an employer had not already set up an employer pension scheme, they will be required to set up a NEST (National Employee Savings Trust). Assuming that an employee does not choose to opt out of the scheme, they will be required to pay 5% of their salary into this scheme, you as the employer will need to contribute 3%.
I would recommend acting now. In our practice, we started a pension scheme at the beginning of this tax year. 1% of pay increases for this year were paid into the scheme as an employer. We also encouraged staff to start making a contribution. Over the next two years, we will continue to pay an element of annual pay rises into pensions, so by 2012 we should meet our obligations without the need for last minute budgeting. The scheme was really easy to set up with the help of our local Lloyds TSB, who also offered help and advice to our staff before they joined the plan.
On a positive note, paying an employer pension contribution does save on employers national insurance, so bear in mind that you could save some money at the same time as meeting your employer obligations. The government may of course change the rules at the 11th hour and it does appear that those who only employ a couple of employees will have a later starting date. This aside, we still feel you should still be aware of the possible new obligations for employers and employees.
Emma Thomas ACA CTA
