EBS

Here are your questions – we have the answers

Compulsory pension contributions are on their way for every business & will take on a much higher profile over the coming months as:

• The Pensions Regulator sends letters to employers outlining the new responsibilities
• The Department for Work & Pensions arranges telephone interviews with a sample of employers (EBS has been selected for a call!)
• The Pensions Bill becomes an Act next month
• NEST – the National Employment Savings Trust goes live

Key considerations for every business will include:

• When will this affect my business?
• Which of my employees will be eligible for compulsory pension contributions?
• Which of my employees can also voluntarily opt-in and request an employer pension contribution?
• How much could this increase my costs by?
• What options do I have to control my costs?
• Does my current pension scheme & contribution basis meet the new requirements or will I need to make changes?
• Should employees not currently eligible be enrolled into my existing scheme or an alternative?
• How much additional administration is involved?

EBS can provide the answers to these questions for your business now – for further information speak to us.

A summary of the proposals is also available from our website.

We reported in November that the Labour Government’s complex anti-forestalling rules for restricting tax-relief on pension contributions for large earners had been overturned and repealed by the Coalition (see here for full details).

The change though is not effective until April 2011 so the anti-forestalling rules still apply and it is worth reminding any high-earners that large payments into pension before 6th April 2011, such as bonus sacrifice, may not necessarily attract the full level of tax-relief expected and could be as low as 20%.

EBS is available to provide specialist advice for employees, click here for full details of our Tax Clinic Service.

In November we commented upon the issues facing employers offering employee benefits should the Government press on with proposals to scrap the Default Retirement Age (DRA).

Employers and the insurance industry heaved a collective sigh of relief when the legislation confirmed that risk benefits (Life Assurance, Income Protection, Accident & Sickness and Private Medical Insurance) would be exempt.

This means that employers can continue to operate these arrangements on the current basis. Those wishing to extend cover should note that insurers are now prepared to offer terms to age 70 but many businesses may choose to link their benefits with the position of the Government which links entitlements to State Pension Age.

Click here for our November article.

For advice on how these changes may impact your business contact EBS.