Workplace Pension Reform – Why Plan Ahead?

Author: Huw Jones
Published: 1st February 2012
Categories:

In October 2018 all business will be automatically contributing 3% of their eligible jobholders qualifying earnings into a workplace pension. In addition eligible employees will be paying 5% of their own salary into a workplace pension.

Non-eligible jobholders can elect to opt in to auto-enrolment, whilst entitled workers can join.

Is your business ready for this extra administration and to increase expenditure on staff by 3%? There are alternatives but they take time to plan and implement.

For example you may want to re-direct planned or future salary increase into the pension.

Salary Sacrifice

Do you and your staff know the advantages of salary sacrifice?

The employees salary is decreased and the residual income paid into a pension. The associated reduction in employer and employee NI is used to fund the pension contributions making it a win-win situation.  There may not even be a reduction in employees take home pay.

Whether the business decides to part fund the additional pension burden using planned salary increases and / or salary sacrifice one thing is clear:

It needs to be planned in advance.

Find out more

To find out how Proposito is already helping businesses plan for these changes please do get in touch.