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Workplace pensions must meet certain Government standards. The scheme can be either a Defined Benefit scheme or a Defined Contribution scheme. This article deals with Defined Contribution schemes.
Current pension schemes can include both occupational pension schemes where the administration is carried out by the employer and personal pension schemes, whether administered as a group scheme or on an individual basis.
The key factors for any pension that will be used as a workplace pension are that the employer must collect and account for all contributions due, having satisfied themselves that the qualifying criteria has been and continues to be met.
The qualifying criteria for eligible pension schemes are intended to be straightforward, these are summarised below:
If your scheme qualifies
You can continue to use it from your staging date (please refer to our article published on 10 January 2014) for existing members. This means that any existing scheme members who will be eligible jobholders on your staging date can remain in that scheme and won't have to be automatically enrolled into a new scheme.
If your scheme doesn't qualify
It may be possible to change the scheme rules so that it does qualify, but if this isn't possible you will need to choose a new scheme.
The difficulty that many employers face is dealing with the uncertainty of what action they need to follow and the consequences of getting it wrong. These consequences can range from additional costs and professional fees through to fines from The Pensions Regulator.
We cannot over emphasise the importance for all employers to seek professional advice at their earliest opportunity. Leaving these issue to the last minute could prove costly and may even result in an inability to find an advisor who is willing (or able) to assist them. This is simply due to the volume of employers who are likely to be looking for help.
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