It’s been acknowledged that in the past employees have missed out on pension benefits either due to their employer not offering them a scheme, or them not remembering to apply to join their company’s scheme.
To help change and improve this, automatic enrolment has been introduced. It’s now compulsory for employers to enrol their workers into their pension scheme. The employer will then pay money into the scheme depending on the amount the worker wishes to put in each month.
They have started by introducing this slowly so that by February 2018 everyone will be enrolled into a workplace scheme.
Why is automatic enrolment being introduced?
It’s been highlighted that people aren’t saving enough for their retirement. Because of this, they are not able to live a comfortable retirement on a state pension. People are also living longer which is increasing the strain on the state benefits system. Automatic enrolment has been implemented to encourage workers to build a pension and save for their retirement.
How do I opt out?
If you don’t wish to join the workplace pension you can choose to opt out once you have been automatically enrolled. If you want to be treated as if you had never joined the scheme, then you will need to leave within one month of being enrolled. Any money paid into the scheme will be refunded in full.
What is the impact of opting out?
If you’re debating the option to opt out or to stop your workplace pension scheme, there are several benefits that you could miss out.
You won’t receive the contributions from your employer that they have to put into the pension pot.
You won’t see any benefits that your scheme may have paid for should you fall ill and are unable to continue working before reaching your retirement date.
You’ll no longer receive any benefits that the scheme may have payed to your dependants in the event of your death.
Here at Pytronot we’re able to offer you and your business HR services including information about workplace pension schemes and what as an employer or employee you have to do, in order to be compliant with government law. For more information get in touch with our team today.