Are you ready for automatic enrolment?
The countdown is well and truly on to the launch of the Trust’s new pension scheme The People’s Pension on 1 April 2014. You should all have seen the communication over the past few months, on your noticeboards and with your payslips, but here are just a few final reminders about what is going to happen next and why!
The Government has introduced a law to help make it easier for people to save for their retirement. It means that all employers must provide a company pension that meets certain standards and automatically enrol eligible employees into the pension if they’re not already members. We’ve chosen to offer The People’s Pension as our workplace pension scheme to meet our employer duties and help you put money aside for your retirement. The People’s Pension is a straightforward pension scheme that gives you one retirement pot for life. Even if you are not eligible for automatic enrolment, you still have the option to join a company pension. This could be a great way to start building up your savings for retirement. Because, when you save into a company pension, you could also get extra payments from us and tax benefits from the Government. How will I know if I am eligible? You will be eligible for automatic enrolment if you: • • • •
Are not already a member of the company pension Are aged over 22, but under state pension age Earn at least £9,440* a year (£787 a month or £182 a week) (* from 6 April £10,000) Work, or usually work, in the UK
If you meet all of these criteria on 1 April 2014, you are eligible, and you will join The People’s Pension. They will write to you to confirm that you have been joined. You don’t need to do anything. How does it work? When you become a member of the company pension, you’ll pay in a minimum amount every month. Your first payment will be taken on 15 April 2014 On top of this we will also make payments into your company pension as follows: You pay 1.0% of your earnings between £5,668 and £41,450* Trafford Community Leisure Trust will pay 1.0% of your earnings between £5,668 and £41,450* Total paid into your company pension = 2.0% of your earnings between £5,668 and £41,450 How payments are made Payments to your pension are taken from your salary before tax and national insurance have been deducted. This will happen automatically – you don’t need to do anything. What if I don’t want to stay in the company pension? The People’s Pension will write to you to confirm that you have been auto-enrolled and are a member and explain the steps to take if you don’t want to stay in.
You can initially opt-out of the pension scheme and we will refund any payments you may have made. You’ll have one month in which to do this from the date The People’s Pension write to you to confirm your membership has started – they will also tell you how to opt out in this letter. It’s important to think carefully before you leave the pension scheme, as it would mean you’d lose out on the payments the Trust makes into your pension, as well as tax benefits from the Government. If you leave The People’s Pension or stop making payments after the one month opt-out period has ended, we normally can’t refund your payments and the company payments will stop. However, the payments that have already been made into your company pension will remain invested until your retirement. Does that mean I’m out for good? Around every three years all employers have to reassess their workforce and automatically enrol eligible employees into the company pension. This assessment will take place on 1 January 2017. If you’re automatically enrolled as a result of this, you’ll be given one month to decide whether you want to stay in the pension or opt out. If you were not eligible for automatic enrolment when you left or stopped making payments, we’ll continue to assess your situation. If you become eligible we’ll then automatically join you into the pension scheme. If this happens, we’ll write to you with more details. What if I am not eligible? You can still choose to join The People’s Pension if you are: Between 16 and 21 or between state pension age and 74, and earn at least £5,668 a year (£473 a month or £109 a week) or •
You are between 22 and state pension age and you earn at least £5,668 a year but less than £9,440 a year (£787 a month or £182 a week)
The only difference is you won’t be automatically enrolled. Instead, you’ll have to let us know that you want to join. We will write to you in April 2014 to let you know what you need to do if you still want to be part of the scheme. You’ll still benefit from extra payments from the Trust and tax benefits from the Government If you earn less than £5,668 a year (£473 a month or £109 a week), you can still ask us to join you to a company pension. You will pay into this but you won’t get any extra payments from the company. Again, we will write to you in April if this applies to you to let you know how you can join the scheme.
We’ll continue to assess your situation and if anything changes, for example if you start to earn more than £9,440 a year (£787 a month or £182 a week), we’ll automatically join you into The People’s Pension. If this happens, we’ll write to you with more details. Finding out more about The People’s Pension You can find out more about pensions and being a member of The People’s Pension by visiting their website at www.thepeoplespension.co.uk If you have any questions in April about contributions or your enrolment please contact chris.kirkham @traffordleisure.co.uk or email@example.com