Pension auto-enrolment dates in discussion. Are you ready?

The Department of Work and Pensions is now revising its consultation on pension auto-enrolment.

From 6 September until 17 October, it will be looking at the earning thresholds at which employers will need to enrol their staff. With the first round of enrolment due to kick off next month, it’s interesting to see the rest of the dates still in discussion.

Initially it was planned that all companies would auto-enrol at the same time. Now it will be phased in over a few years, dependent on company size, which is a good indication that the consultation process is working and that government is listening.

As of October, employers with 10,000 or more staff will be obliged to enrol all workers who meet the age and earnings criteria into a workplace pension, and this will need to be completed by March 2013. The thresholds currently being discussed determine who contributes and how much this will be. When this was originally introduced as an idea, the plan was to ask for contributions of 11%. This is expected to ramp up after the consultation.

The date for companies with 250 staff is still being discussed, and they will get their date in 2013/14.

For most umbrella companies, the auto-enrolment date will be next year, but it’s best to be prepared now. Thinking about how this impacts umbrella and contract workers is interesting, and our initial thoughts would be that the majority of our staff will opt out, rather than suffer the full brunt of the cost, choosing private pension schemes instead.

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Government department’s IR35 checks step up a gear

According to claims by contractor accountants Orange and Gold, one of its clients has reportedly received a letter from their employer – a government quango – asking that they either produce their payslips or clear off.

But not quite in those words.

The payslips are required as evidence to the quango that the contractor has been paying national insurance and is working within IR35. The concern is that limited company or personal service company contracting allows for tax abuse, and in some cases the right levels of contribution aren’t being made.

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