Have to provide pension for employees?

[BCBG]

Hi, just wondering if anyone knows more than me about this? I have had a mother's help part time for a good few years now, and have always paid her tax and NI through the Simplified Deduction Card system. I have just seen some paperwork from the Pensions Regulator that says that ALL employers will be required to set up a pension scheme for their employees (even if they only have one part time one says their unhelp desk) between now and 2016, and contribute 3% into it (employee to contribute minimum of 5%). Employee could opt out by must be their choice (obviously) and the employer must set the scheme up in any case. Unsurprisingly my DH has said that this is now ridiculous and that I will have to go without my mother's help . She and I are very close and she has been a great support to me. Just wondered if anyone else was aware? Have I got it right?

Don't panic. It's very simple to open a stakeholder pension for your employee. There are loads of pension companies who will do it for you with minimum paperwork. All you then have to do is make sure you pay in the 3%. It's up to her if she puts any more in.

I didn't think small employers had to do it until 2016 by which time no doubt there will be providers who will operate the scheme for small employers. I may be wrong though - anyone know for sure when small employers have to implement pension scheme?

The 3% will be like Employers NI, something you budget for when setting the salary, I would have thought.

Your mothers help may already have a pension they pay into - if they do, I don't know how that would affect things. Does anyone know what will happen to existing pensions?

The timetable has moved and may move again: the earliest it will apply for small employers is 2016. As nocake says you can satisfy your obligations simply by paying 3% of salary into a stakeholder pension, there are no other costs and there are already plenty of providers to this market.

An earlier change that will affect you is closure of the so-called Simplified Deduction Scheme from April 2013 with the introduction of Real Time Information (RTI) - don't worry, changes over the years since it was introduced mean that it is now easier to run the normal PAYE scheme than the simplified scheme!

MrAnchovy what I don't understand is is this 3% from existing gross salary or calculated as a payment on top?

It is a payment on top.

Thanks.

It's four years away, I wouldn't worry about it now, it may not even happen. X