Automatic Enrollment Pension
The government has introduced a new law to make it easier for people to save for their retirement. It requires all employers to enroll their workers into a qualifying workplace scheme if they are not already in one. At present, many workers fail to take up valuable pension benefits because they do not make an application to join their employer's scheme. Automatic enrolment is meant to overcome this. Although automatic enrolment comes in from 1 October 2012, individual employers' duties will be introduced gradually over the following five years, and will be based on the employer's size.
The law on the new employer duties and safeguards will commence from July 2012. Each employer will be allocated a date from when the new duties will apply to them, known as their ‘staging date’. The staging dates will start from October 2012. This is the first step as an employer in getting ready for the new duties. One of these duties will place new requirements on employers to automatically enroll certain workers into a pension scheme. An employer should work back from their staging date to understand when they should start to take the actions as per guidance. It is each employer’s responsibility to identify their staging date and to work out when they must act to be ready for the new duties. The staging date is based on the number of people in the employer’s largest Pay As You Earn (PAYE) scheme.
Staging will start in October 2012 and will be rolled out based on the largest to smallest PAYE schemes. The Department for Work and Pensions (DWP) has announced that employers with fewer than 50 persons in their PAYE scheme will not be brought into the employer duties until June 2015 at the earliest. This means that the staging dates for many employers may change, although employers with 250 or more persons in their largest PAYE scheme will be unaffected and will be staged between October 2012 and February 2014.
Auto Enrollment Process that is delivered will perform the assessment of active employee based on eligibility criteria of age and earnings and if eligible they will be enrolled automatically to Qualifying Pension Scheme. As part of system delivered functionality, it takes care of deduction from payroll, option to opt-in and opt-out of the payee and generation of reports.
For detailed information please download our white paper published on My Oracle Support, Document ID 1504871.1.