Around the world, employees and employers are concerned about whether workers will have sufficient financial resources on which to retire. The UK is addressing this problem aggressively by enacting new legislation that requires all UK workers to be automatically enrolled in a qualifying workplace pension scheme (defined contribution, defined benefit or hybrid scheme providing minimum benefits) as a supplement to state pension benefits. The auto-enrollment legislation begins taking effect in October 2012 for employees of the largest UK employers.
“This shift in workplace pension provision – from voluntary to quasi-compulsory – has been a long time coming,” says Rachel Brougham, a defined contribution consultant in Mercer’s Retirement, Risk & Finance business and leader of the UK auto-enrollment team. “The crux of the legislation is that each employer will have to make arrangements for most of its employees to automatically join a pension scheme that satisfies certain minimum requirements. In addition, employers must make at least minimum contributions on behalf of those who choose to remain members of the scheme.”
Learn more about the provisions of the new auto-enrollment legislation.
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For more information about preparing for the new legislation, visit http://uk.mercer.com/articles/