October 2012: pensions auto-enrolment begins, minimum wage increases and default retirement age regime ends
On 1 October 2012, the duty on employers to auto-enrol "eligible jobholders" into a "qualifying pension scheme" will come into force for the largest employers, and the national minimum wage increases, with the main rate going up from £6.08 to £6.19. In addition, the last possible date for a retirement under the now repealed statutory retirement procedure is 5 October 2012.
The Pensions Act 2008 and the Pensions Act 2011 require employers to auto-enrol "eligible jobholders" not already participating in a workplace pension scheme into a "qualifying pension scheme" and to make minimum contributions to the scheme on the jobholders' behalf. The duty to auto-enrol will be phased in, with the date on which employers must auto-enrol "eligible jobholders" (their "staging date") depending on the number of workers in the employer's PAYE scheme on 1 April 2012. The first staging date is 1 October 2012, which applies to the largest employers (those with 120,000 or more people in their PAYE scheme). Employers may postpone their automatic enrolment date for up to three months, although jobholders will be able to opt in during the postponement period.
On 1 October 2012, the main rate of the national minimum wage, for workers aged 21 and over, goes up to £6.19 per hour. The rate for workers aged at least 18 but under 21 and the rate for workers under 18 who are no longer of compulsory school age will not change this year. The apprentice rate rises to £2.65 per hour.
The Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 (SI 2011/1069), which came into force on 6 April 2011, abolished the default retirement age of 65 and the associated statutory retirement procedure. The transitional provisions set out in the Regulations permit employers to agree to an extension of not more than six months beyond the employee's proposed retirement date. A six-month extension from 5 April 2012 (the last possible retirement date without an extension) would take the employee's employment up to 5 October 2012, making this the last possible date for a retirement under the statutory procedure.
Pensions auto-enrolment
- FAQs: Pensions The XpertHR FAQs section provides answers to frequently asked questions on pensions including on pensions auto-enrolment.
- Pensions auto-enrolment - staging dates Use this table to check the date from which employers are required to auto-enrol eligible jobholders into a qualifying workplace pension scheme, from the XpertHR quick reference section.
- Pensions auto-enrolment Prepare for pensions auto-enrolment with the help of this interactive Liveflo flowchart.
- Topic of the week: Pensions auto-enrolment The XpertHR topic of the week series on pensions auto-enrolment provides:
National minimum wage
- FAQs: National minimum wage The XpertHR FAQs section provides answers to frequently asked questions on the national minimum wage.
- Letter advising a worker of a pay increase because of a rise in the rate of the national minimum wage Use this model letter to advise a worker that his or her pay is increasing because of a rise in the rate of the national minimum wage.
- National minimum wage Use this table to check the current minimum wage payable to adult workers, as well as the minimum level for young workers, from the XpertHR quick reference section.
- In the employment tribunals Case reports on employment tribunal decisions on XpertHR involving:
Retirement
- FAQs: Retirement The XpertHR FAQs section provides answers to frequently asked questions on retirement.
- Post-default retirement age - retirement policy and procedure Use this model policy to deal with the retirement of employees to whom the default retirement age does not apply.
- Line manager briefing on retirement This line manager briefing looks at the law and best practice on retirement after the abolition of the default retirement age on 6 April 2011. It guides line managers on whether or not compulsory retirement is permissible, voluntary retirement, and managing employees where no compulsory retirement is in place, including managing declining performance.