subject: Micro Employers to be auto enrolled [print this page] Micro Employers to be auto enrolled
The National Employment Savings Trust (Nest) will not exclude micro-employers from auto-enrolment into a pension scheme but will not force employees earningbelow the 7,500 threshold to join, pension minister Steve Webb has confirmed.
Nest willnot force anyone earning below 7,500PAYE threshold to enrol but will allow those on a percentage earnings band between 5,000and 7,500 to opt in. From 2012 every UK company will have to have a pension scheme, according to a government review of auto-enrolment.
According to the Pensions Act (2008) employers should provide an adequate pension scheme for eligible employees those aged 22 or more and earning at least 5,035 a year. If a company does not provide a scheme, employees will be auto-enrolled inNest and employers forced to make a minimum contribution.
However, the report suggests employees should only be auto-enrolled into a scheme if earning 7,500, higher than the original 5,035 figure.
The national workplace pensionscheme will not exclude micro-employers,thoseemploying up to four members of staff,as the government's auto-enrolment review team did not want to exclude people just because they are the only employee.
However, it warned therewould be a big one-off cost of around 1,500 toenrolthewhole workforce in Nest.
Webb also confirmed that auto enrolment would not apply to employees in their first13 weeks of work, giving employers a three month grace period before having to commit time and money to enrolling. If staff choose to enrol before the three month period then companies will have to make contributions.
The minister also confirmed the government would take a light-touch approach to 'perfectly good' employer pension schemes already in place.
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