The Government has confirmed that it remains committed to auto-enrolment, stating that it is a key aspect of dealing with ‘under-saving’.   

From October 2012, employers will be obliged to conform to the auto-enrolment requirements from ‘Staging Dates’ which will depend on the size (number of employees) of their PAYE payroll. Where an employer has more than one PAYE payroll code, the relevant Staging Date will be that relating to the largest payroll (by number of employees).  

Once the Staging Date is reached, all employees aged between 22 and State Pension Age will need to be auto-enrolled into a ‘qualifying’ automatic enrolment scheme (suitable workplace pension arrangement or NEST). The test for a DC scheme to count as ‘qualifying’ is based on the level of contributions.  

The minimum level of contributions will be phased in over a 5 year period, as set out below:

Contributions will be based on Qualifying Earnings (gross earnings between £5,035 and £33,540 in 2006/7 terms) and there will be no ‘minimum’ amount of contribution that needs to be met. For example, if an employee has total gross earnings of £5,040 (in 2006/7 terms) the above rates will be applied, and paid, in respect of £5 worth of Qualifying Earnings!

For more information about auto-enrolment, visit www.xafinity.com/autoenrolment