As a client of Morgen HR Ltd you will receive regular updates to your policies and procedures in line with changes in legislation.
These updates ensure that you always remain compliant whilst offering practical ideas on implementation.
Not only will we update your existing policies but we will also write and help you implement new policies or procedures as legislation changes – even if these are not directly HR related.
| Pensions, NEST and You | Default Retirement Age | National Minimum Wage |
In a written statement to parliament dated October 27 2010, Minister for Pensions Steve Webb announced that the government would implement automatic enrolment into the National Employment Savings Trust (NEST) where an “adequate” alternate pension scheme isn’t offered, as recommended by independent review. These reforms will be rolled in from October 2012.
This means from October 2011 automatic enrolment for the Nation Employment Savings Trust (NEST) will begin for the largest employers, with all employers automatically enrolling by September 2016.
The level of contributions will also be phased in. Until October 2016 the minimum level of contributions will be 2% with 1% coming from the employer. From October 2016 till September 2017 the minimum contributions will be 5% with 2% from the employer and from September 2017 the minimum level will be 8% with 3% from the employer.
So yes, the changes are huge and will make a significant impact on business in the UK (again), especially small and micro businesses and although it may seem far away yet, now is the time to get your plans in place.
Additional information
NEST Corporation, the trustee body of NEST (National Employment Savings Trust) have announced that NEST will charge 0.3 per cent annually on a member’s funds under management, with a charge on contributions of 1.8 per cent.
Earlier this year, the Government announced that NEST would operate with two charging elements: an annual management charge (AMC) of 0.3 per cent and a contribution charge expected to be around 2 per cent. The duty of setting the charge level lay with the Trustee of NEST. As of 25 November NEST Corporation (the Trustee) has set the charge on contributions at 1.8 per cent. The charge on contributions will cover the initial set-up costs of NEST.
The Default Retirement Age (DRA) changes from 6 April 2011
Subject to Parliamentary approval, the DRA is being phased out over a transitional period running until 30 September 2011. Details will be set out in Regulations coming into force on 6 April 2011. The last date on which an employee can be given notice of retirement under the DRA is 5 April 2011.
Under the DRA employers must give a minimum of six months notice of retirement but no more than 12 months notice. Retirements notified on or before 5 April 2011 can continue through to completion provided that the following conditions are met:
- the DRA procedure, as set out in the previous Employment Equality (Age) Regulations 2006, is followed correctly (including the employee's right to request to stay on is given serious consideration by the employer)
- the person retiring reaches 65 or the normal retirement age (if this is higher) before 1 October 2011. Therefore an employee must be 65 by the 30 September if they are to be retired using the DRA.
Employers will not be able to issue notifications of retirement using the DRA after 5 April 2011.
The provision allowing short (two weeks') notice of retirement, will also be repealed on 6 April 2011, and such short notice notifications will not be permitted on or after this date.
For employer-justified retirement ages, all notifications made prior to 6 April 2011 will continue to be valid, and there is no reason to curtail any notifications made under the former DRA arrangements prior to that date.
The above information is designed to give an overview of employer considerations which will result from the intended changes.
The new minimum hourly pay rates from 1 October 2010.
- £5.93 for workers aged 21 and older.
- £4.92 for wokers aged 18 - 20.
- £3.64 for workers aged 16 - 17.
- £2.50 for apprentices aged 18 and under or in the 1st year of their apprenticeship regarless of age
