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The fact that many people are reluctant to voluntarily
contribute towards their own pension arrangements has
led the present Government to act. Automatic enrolment
into a qualifying pension arrangement is to be introduced
from October 2012 to provide a “new way to save”.
On introduction all employees aged between 22 and state
pension age with earnings in the band between £7,336
pa and £33,540 pa (a figure that will increase)
will automatically be enrolled into a qualifying arrangement,
this can be into a qualifying workplace pension scheme
or, failing that staff will automatically be enrolled
into NEST (National Employment Savings Trust) –
an arrangement being set up by the Government specifically
for this purpose.
Employees do have the choice to opt-out and effectively
not contribute however if this option is chosen they
must then be reintroduced back into the Scheme at least
once every three years by their employer.
We in the plumbing and mechanical services industry
are fortunate in that we already have a qualifying Pension
Scheme that is available to all employees (not just
plumbing operatives). If you are an employer who currently
operates the scheme this is the perfect opportunity
to enrol all remaining staff members in order to meet
legislative requirements. If you are not currently operating
the scheme this would now be an opportune time to investigate
the possibility of participating.
As an employer you STILL have the right to choose the
most appropriate arrangement for your employees.
We at Plumbing Pensions pride ourselves in the knowledge
that we operate one of the largest industry-wide pension
schemes within the UK, offering members a defined pension
benefit on retirement with the option to “give
up” up to 25% of the pension value in return for
a lump sum payment, all or part of which will be tax
free. As well as pension benefits on retirement we also
offer comprehensive death cover.
Membership of the Scheme is open to all company employees
with basic contribution levels at 3.75% of gross earnings
for employees and 7.5% for employers. In real terms,
due to National Insurance savings and tax relief on
paid contributions, the net contribution rate can be
reduced to less than 2% for employees and less than
3.5% for employers.
As a comparison the minimum contributions payable into
NEST are 4% of gross earnings for employees and 3% for
employers.
As the time is fast approaching to make decisions we
would welcome the opportunity to meet with you to answer
questions, to discuss the forthcoming legislative changes
and also to confirm what the Industry Pension Scheme
can offer you and your employees.
Please contact our Business Development
Executive, Angela Smith by telephone on 01889 563654
or by email.
She will then arrange a convenient time to meet with
you to discuss the legislative changes that are proposed.
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