Auto Enrolment Archives

The Growth and Infrastructure Act 2013 comes into force on 1st September 2013 and Section 31 makes changes to the Employment Rights Act 1996 inserting section 205A Employee Shareholders.

205A Employee shareholders

(1) An individual who is or becomes an employee of a company is an “employee shareholder” if—

(a) the company and the individual agree that the individual is to be an employee shareholder,

(b) in consideration of that agreement, the company issues or allots to the individual fully paid up shares in the company, or procures the issue or allotment to the individual of fully paid up shares in its parent undertaking, which have a value, on the day of issue or allotment, of no less than £2,000,

(c) the company gives the individual a written statement of the particulars of the status of employee shareholder and of the rights which attach to the shares referred to in paragraph (b) (“the employee shares”) (see subsection (5)), and (d) the individual gives no consideration other than by entering into the agreement.

(2) An employee who is an employee shareholder does not have—

(a) the right to make an application under section 63D (request to undertake study or training),

(b) the right to make an application under section 80F (request for flexible working),

(c) the right under section 94 not to be unfairly dismissed, or

(d) the right under section 135 to a redundancy payment.

Giving up employment rights might not sound like a good idea for employees but there are tax advantages for both the employee and employer:

Dividends are not subject to PAYE or National Insurance
Dividends would not be used as Pay in Auto Enrolment
Capital Gains Tax Allowances should make most gains tax free
The employer will benefit from cost savings on the sacrificed employment rights

steve@bicknells.net

The Growth and Infrastructure Act 2013 was passed on 25 April 2013 – See more at: http://www.shepwedd.co.uk/knowledge/?a=5073#sthash.WVlFdcKS.dpuf

Auto Enrolment has arrived and there is a lot to do……

The Pension Regulator website will help you create a stage by stage plan working back from the date when you need to start (staging date), it is a useful planning tool http://www.thepensionsregulator.gov.uk/employers/planning-for-automatic-enrolment.aspx

Most schemes will be set up with one of the following providers:

NEST – National Employment Savings Trust – NEST was originally created by the government – limited help for employers

The Peoples Pension – B&CE – B&CE is well known in the Construction world, they have online tools to help you

Now: Pensions – ATP (Denmark) – 45 year experience in pensions and many awards

You could use another provider and you should take independent expert advise, never give pension or investment advice unless you are qualified to do so.

If you are asked for advice remember to say ‘I know nothing’

But as an employer you do need to select a pension scheme for Auto Enrolment.

Then you need to consider how you will comply with your responsibilities and keep records for:

Contributions
Opting Out
Opting In
Earnings
Employee Records
Communication with Employees

Take a look at this video for middleware to get an understanding of how you could manage your compliance requirements

So here are your 3 basic ways to comply:

Small Employers – you may decide to do it yourself using information on the Pension Regulators website and provider of your choice
Pension Provider Portals – schemes like the Peoples Pension will have portals and tools to help you manage your auto enrolment pensions but it won’t cater for other benefits and other schemes
Middleware – like the video above, this gives lots of functionality and will allow you incorporate other schemes and benefits but its not free

You might also find this blog worth reading ‘10 things you need to know about Pension Auto Enrolment’

steve@bicknells.net