All employers will be required to automatically enrol staff into the company pension scheme between now and 2018 depending on the size of the company. The new system of Auto-Enrolment (AE) will be effective from October 2012 for large corporations and will apply to all employees earning above a required threshold.
All employees aged over 22 and earning over £7,475 will be auto-enrolled into the company pension scheme. Employees can ofcourse opt out of the pension scheme if they so desire. The new system will place a greater administrative burden on small businesses who will need to upgrade their payroll systems to comply with the new legislation. Small businesses are advised to act now to prepare for the new changes.