Automatic Enrolment into a workplace pension - "I'm In"
Social Development Minister Nelson McCausland has reminded local businesses that pension automatic enrolment is now underway.
~ Thursday, 7 March 2013
Starting with the largest firms, employers are required by law to pay into a workplace pension for staff who do not opt out. By May 2015 it is estimated about 4.3 million people in the UK will say “I’m in” and will be saving for their old age. Automatic enrolment is being phased in and between now and 2018 employers here will come on stream.
Discussing the new auto enrolment system, the Minister said: “People are living longer and healthier lives than ever before and this makes it more important than ever that we all plan for our retirement. The introduction of automatic enrolment is one of the biggest changes to pensions in the UK in the last hundred years and will help people do just that.
“For many it will be the first time they have had the opportunity to be in a scheme to save for their retirement and their employer will be paying in as well. I want to encourage all employees who will be auto-enrolled into the new scheme to carefully consider the benefits of auto-enrolment and remain in the scheme.”
The Minister added: “An awareness campaign in the local media will begin tomorrow to help businesses introduce automatic enrolment with an advice helpline and a range of advice available online on the NIDirect and my Department’s website.
“I am grateful for the support of the CBI with the introduction of the ‘I’m in’ automatic enrolment awareness campaign, once in place the new system will give people a better, more comfortable retirement.”
Welcoming automatic enrolment CBI Northern Ireland Assistant Director, Kirsty McManus said: “As Northern Ireland’s ageing population continues to increase, we need more people to start recognising the value of saving for retirement. Auto-enrolment will help rebuild a positive savings culture in the workplace and encourage people to take control of their retirement plans as they adapt to the happy challenge of rising lifespans gradually over time, and avoid a future pension funding crisis."
Kirsty McManus continued: “As more companies fall under the umbrella of auto-enrolment as it is phased in, it is important that all businesses understand what their legal duties are and make the necessary preparations for their staff.”
The nidirect website contains a comprehensive outline of the impact of the changes on individuals
Notes to editors:
- Starting with the largest employers, from October 2012, bosses across the UK are required by law to pay into a workplace pension for all eligible staff who do not opt out. Anyone over 22 years of age, currently earning more than £8,105 and working for an employer who is affected will be automatically enrolled. Larger employers in Northern Ireland are now starting to come on stream. All employers will enrol their staff by 2018. For more information see the Pensions Regulator website
- Key facts about automatic enrolment:
Around one in three adults are contributing to a pension, while people are on average living longer – in the past 25 years, life expectancy at age 65 has increased by five years for men and three years for women
The employer is also compelled to provide a minimum level of contributions. Minimum contributions start at 1% and by October 2018 build to 4% for employees which equates to 8% overall (employer at 3%, employee at 4%, and tax relief at 1% combined) of a band of earnings
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