Commencing Obligatory NEST Eggs For Staff

HR payroll offices at companies of all sizes and across a diverse range of sectors will by now be aware, if not fully conversant, with recent Government legislation passed in October 2010 that will oblige all businesses to enrol their staff in to a pension scheme due to begin in October 2012 and known as the National Employment Savings Trust, abbreviated to NEST.

Under current employment law, it is the responsibility of HR payroll representatives who employ five or more staff to offer their team members a pension scheme, although they are not obliged to make any contributions on behalf of their companies. However, the changes coming in to being from 2012, which will then remain in place until 2016, will dictate that staff who earn above £7475 will have 2% per year of their earnings in excess of £5715 paid in to NEST on their behalves, with 1% being contributed by the company.

After the initial four years of the scheme, their will be a further increase in company contributions to 2% of an overall 5% of staff earnings between October 2016 until September 2017. This will then be followed by the final increase from October 2018, when overall contributions will settle at 8% of earnings, with 3% coming from employers.

The only exclusions to automatic enrolment will be if employees earn less than the specified minimum amount, have not worked for their employers for three months, are under twenty two years or age or are above the relevant state pension age for female and male employees. Many HR payroll professionals are concerned about the potentially large cost implications for their companies, which could resultantly mean decreases in growth and recruitment.

We at Moorepay are expert in all matters relating to pensions and are at hand, both now and throughout the future changes, to guide our clients through the minefield of compliancy.