Pensioners can heave a sigh of relief with the scheme related to auto-enrolment. It has been indicated through researches and studies that more and more people are wishing to apply for this procedure. Many employers as well as employees are going for the schemes related to auto enrolment. This scheme that was introduced in the year 2012 and since then many employees have benefitted with this scheme. Enrolling in company’s pension rule is a great idea for employees. The main objective of this scheme is to enjoy a simple and comfortable retirement life for employees who are unable to save enough at the time of their service tenure.
A minimum four percent earnings need to be contributed by the individuals under this new policy. It is significant to note here that one percent is the minimum level set for the employees as the scheme comes into force. Overall premiums will be topped by the government at 1% rate. The right to retain this procedure or opt out of it is retained with the workers, though every 3 years employers may need to be re-enrolled.
By 2017, the contribution level of employers is slated to increase by three percent but there are concerns related to earlier one percent increase that is sure to encourage companies to reduce levels that exist with minimum. Presently, six percent contribution is made by many employers in the staff pension.
Auto enrolment opt outs facility is also offered to the employees with the help of which they can opt out of this scheme any time they wish. Similarly, they can opt for this scheme whenever they wish. Companies can enjoy more incentives like reducing benefits that is offered to the employees in order to meet expenses when incurring additional costs of this scheme implementation. As implementation of reforms took place, it has been witnessed that almost half employers were either “highly unlikely” or “likely” to bring about a reduction in the pension schemes.
Still, this scheme has been accepted with open arms by many employers to bring about a comfortable life for their employees when they get retired. People who have too many responsibilities and are unable to save much during the course of their jobs can benefit a lot with this scheme. This way, even if retirement planning at individual is at a minimum level, employees can gain advantages from this scheme. This scheme came into existence in lie of high life expectancy rates.
Auto Enrolment Scheme-A boon for pensioners!