Difference between revisions of "How do I set up a pension scheme in Platinum Payroll?"

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{{Review}}
 
 
== Summary ==
 
== Summary ==
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The following article explains how to set up Pension Schemes, including Auto Enrolment Schemes. This enables the system to calculate contributions correctly.  
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The following article explains how to set up Pension Schemes, including Auto Enrolment Schemes. This enables the system to calculate contributions correctly.
  
 
== More Information ==
 
== More Information ==
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* Go to {{PayrollSettings|Company Parameters|Pension Schemes}}.
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Go to {{Menu|{{PlatinumModuleSettings}}|{{PR}}|Module Settings}}
 +
* Scroll down to the {{DataPrompt|Pension Schemes}} section.
  
 
=== What do I need to know? ===
 
=== What do I need to know? ===
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==== Pension Details ====
 
==== Pension Details ====
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Choose the next blank line and enter the scheme name (max 15 characters).
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For each applicable pension scheme, complete the relevant information.
  
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==== Tax ====
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Click on {{DataPrompt|Pension Description}} then click {{Button|Edit}}.
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What is the tax and NI treatment of the employee contributions? If you are not sure, check with your pension adviser.
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* Enter the name of the scheme, max 15 characters, e.g. {{DataValue|NEST}}
 +
* Click {{Button|Done}}.
  
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* {{DataValue|Y}} - Yes. The contribution made by the employee is subject to tax, i.e. the contribution is deducted from Gross Pay after PAYE has been deducted. This is the "Relief at Source" method.
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Click on {{DataPrompt|Employee percentage}} then click {{Button|Edit}}.
 +
* Specify if the employee deduction will be a percentage ({{DataValue|Y}}) or specified amount ({{DataValue|N}}).
 +
* Click {{Button|Done}}.
  
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* {{DataValue|N}} - No. The contribution made by the employee is not subject to tax, i.e. the contribution is deducted from Gross Pay before PAYE is calculated. This is the "Net Pay" method.
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Click on {{DataPrompt|Employee amount}} then click {{Button|Edit}}.
 +
* Depending on your choice for the previous flag enter the employee deduction.
  
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* {{DataValue|S}} - Salary Sacrifice. The notional employee contribution is paid by the employer and is not subject to tax or NI, i.e. it is not included in taxable gross pay or earnings for NI purposes. This is the "Salary Sacrifice" method.
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{{Information|text=For a {{DataValue|Relief at Source}} scheme, for the 2022-2023 tax year ending on the 5th April 2022 the Employee Percentage remains at {{DataValue|4%}}. This takes account of the 20% tax relief on the employee contribution that the pension company will claim from the government which makes up the balance of the 5% Employee contribution.}}
  
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==== % ====
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{{Information|text=For a {{DataValue|Nett Pay}} scheme, for the 2022-2023 tax year ending on the 5th April 2021 the Employee Percentage remains at {{DataValue|5%}}.}}
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Is the Value, entered in the {{DataPrompt|%/Value}} column to the right, a Percentage?
 
  
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* {{DataValue|Y}} - Yes, the value is a Percentage. Auto Enrolment schemes are typically a percentage.
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* Click {{Button|Done}}.
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* {{DataValue|N}} - No, the value is an Actual Value.  
 
  
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==== %/Value ====
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Click on {{DataPrompt|Employee limit}} then click {{Button|Edit}}.
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* {{DataValue|%}} - The percentage to deduct. For a {{DataValue|Relief at Source}} scheme, for the 2017-2018 tax year ending on the 5th April 2018 the Employee Percentage should be reduced by {{DataValue|0.2%}}, e.g. a {{DataValue|1%}} contribution should be entered as {{DataValue|0.8%}}
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* Select the NI Limit to apply to the scheme.
 +
** {{DataValue|None}} - Calculate the pension on the whole pensionable gross.
 +
** {{DataValue|NI Lower Earnings}} - Apply the NI Lower Earnings Limits (2022/2023 rates)
 +
** {{DataValue|NI Upper Earnings}} - Apply the NI Upper Earnings Limits (2022/2023 rates)
 +
** {{DataValue|NI Both}} - NI Qualifying Earnings i.e. NI Upper & Lower Earnings Limits (2022/2023 rates)
 +
** {{DataValue|DWP Lower Earnings}} - Apply the DWP Lower Earnings Limits (2022/2023 rates)
 +
** {{DataValue|DWP Upper Earnings}} - Apply the DWP Upper Earnings Limits (2022/2023 rates)
 +
** {{DataValue|DWP Both}} - DWP Qualifying Earnings i.e. DWP Upper & Lower Earnings Limits (2022/2023 rates)
  
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For a {{DataValue|Relief at Source}} scheme, for the 2018-2019 tax year ending on the 5th April 2019 the Employee Percentage should be reduced by {{DataValue|0.2%}}, e.g. a {{DataValue|3%}} contribution should be entered as {{DataValue|2.4%}}
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* Click {{Button|Done}}.
  
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. Do NOT reduce the Employer contribution.
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Click on {{DataPrompt|Employer percentage}} then click {{Button|Edit}}.
 +
* Specify if the employer deduction will be a percentage ({{DataValue|Y}}) or specified amount ({{DataValue|N}}).
 +
* Click {{Button|Done}}.
  
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* {{DataValue|Actual Value}} - This is a default field which can be left blank. When you are linking a scheme to an employee you can amend the employer's contribution for an individual, if it differs from the default.
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Click on {{DataPrompt|Employer amount}} then click {{Button|Edit}}.
 +
* Depending on your choice for the previous flag enter the employer deduction.
  
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{{Information|text=Click this link to check the definition of the type of scheme you are involved with [http://www.nidirect.gov.uk/workplace-pensions-and-tax-relief Workplace pensions and tax relief]. Queries regarding claiming tax back should be aimed at your Pension Provider.}}
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{{Information|text=For the 2022-2023 tax year the Employer contribution remains at {{DataValue|3%}}.}}
  
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==== Limits ====
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* Click {{Button|Done}}.
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Define the NI Limits to be applied to the Pensionable Gross if Percentage Calculations are to be used.  
 
  
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* {{DataValue|N}} - Calculate the Pension on the Whole Pensionable Gross.  
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Click on {{DataPrompt|Employer limit}} then click {{Button|Edit}}.
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* {{DataValue|L}} - Limited to the NI Lower Earnings Limit only.
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* Select the NI Limit to apply to the scheme.
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* {{DataValue|U}} - Limited to the NI Upper Earnings Limit only.
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** {{DataValue|None}} - Calculate the pension on the whole pensionable gross.
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* {{DataValue|B}} - Apply the percentage to pensionable gross between the NI Lower Earnings Limit and Upper Earnings Limit. Typically known as {{DataValue|Qualifying Earnings}}.
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** {{DataValue|NI Lower Earnings}} - Apply the NI Lower Earnings Limits
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* {{DataValue|E}} - Limited to the NI Upper Earnings Limit only (now same as {{DataValue|U}} but differed previously).  
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** {{DataValue|NI Upper Earnings}} - Apply the NI Upper Earnings Limits
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* {{DataValue|O}} - Apply the percentage to pensionable gross between the NI Lower Earnings Limit and Upper Earnings Limit (now same as {{DataValue|B}} but differed previously). Typically known as {{DataValue|Qualifying Earnings}}.
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** {{DataValue|NI Both}} - NI Qualifying Earnings i.e. NI Upper & Lower Earnings Limits
 +
** {{DataValue|DWP Lower Earnings}} - Apply the DWP Lower Earnings Limits
 +
** {{DataValue|DWP Upper Earnings}} - Apply the DWP Upper Earnings Limits
 +
** {{DataValue|DWP Both}} - DWP Qualifying Earnings i.e. DWP Upper & Lower Earnings Limits
 +
 
 +
* Click {{Button|Done}}.
 +
 
 +
Click on {{DataPrompt|Tax relief}}
 +
* Select the type of scheme and click {{Button|Done}}.
 +
 
 +
{{Information|text=Click this link to check the definition of the type of scheme you are involved with [https://www.thepensionsregulator.gov.uk/en/employers?gclid=EAIaIQobChMIm4fu9Lmd4QIVb77tCh2BuQu_EAAYASAAEgLB__D_BwE Workplace pensions and tax relief]. Queries regarding claiming tax back should be aimed at your Pension Provider.}}
 +
 
 +
{{Warning|text=You '''must''' ensure you check your settings and seek clarification from your pension provider and/or accountant if you are unsure of the type of scheme you have enrolled in.}}
  
 
== Automatic Enrolment Scheme ==
 
== Automatic Enrolment Scheme ==
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If this is your Auto Enrolment scheme:
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* Select {{DataPrompt|Automatic Enrolment Scheme}} and click {{Button|Edit}}.
 +
* Choose the number of the scheme then click {{Button|Done}}.
  
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* Enter the line number, as shown to the left of the scheme description, in {{DataPrompt|Automatic Enrolment Scheme}}.
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== Employer's Duty Start Date (Staging Date) ==
 +
If not already specified, select this option and enter the date your company joined automatic enrolment.
 +
* Click {{Button|Done}}.
  
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Please make sure you have completed the Staging Date to activate Auto Enrolment.
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{{Information|text=Please note your re-enrolment date will be based on this date so please ensure it is accurate.}}
  
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{{Note|text=If your staging date falls in the current [[How do I Run a Payroll Period?|Payroll Period]], please be aware the system may start making deductions immediately.}}
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* To save your settings click {{Button|Done}} and {{Button|Accept}}.
  
 
== Allocating a Scheme to an Employee ==
 
== Allocating a Scheme to an Employee ==
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To allocate an individual Pension Scheme to an employee, go to the {{Tab|TAX, NI & Pension}} page in the Employee record. You can amend the default Employee and Employer's contribution if necessary. You can also enter voluntary top up contributions for both the Employee and the Employer if applicable.  
+
To allocate an individual Pension Scheme to an employee, go to the {{Tab|TAX, NI & Pension}} page in the Employee record. You can amend the default Employee and Employer's contribution if necessary. You can also enter voluntary top up contributions for both the Employee and the Employer if applicable.
  
 
{{Note|text=This is not necessary for Automatic Enrolment schemes. The system will set the scheme for you when the first period of enrolment is closed.}}
 
{{Note|text=This is not necessary for Automatic Enrolment schemes. The system will set the scheme for you when the first period of enrolment is closed.}}
  
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== Increasing Automatic Enrolment Contributions (6th April 2018) ==
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For advice or clarification of auto enrolment schemes please speak to your pension provider or view [https://www.thepensionsregulator.gov.uk/en/employers/managing-a-scheme/contributions-and-funding The Pensions Regulator] for advice.
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The minimum contributions that employers and employees will pay into automatic enrolment workplace pension schemes are increasing from 6th April 2018.
 
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When you have moved into the tax year 2018-2019 please follow these steps to update the percentage to apply to your auto enrolment scheme.
 
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Go to {{PayrollSettings|Company Parameters|Pension Schemes}}.
 
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* Move down to the relevant scheme.
 
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* Press {{KeyPress|Enter}} to move across to the {{DataPrompt|%/Value}} column.
 
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* Overtype the percentage with the updated percentage to apply to your scheme.
 
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* For a {{DataValue|Relief at Source}} scheme the Employee Percentage should be increased to {{DataValue|3%}} '''less''' tax relief at 20% i.e. a {{DataValue|3%}} contribution should be entered as {{DataValue|2.4%}}. The Employer contribution should be increased to {{DataValue|2%}}.
 
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* For a {{DataValue|Nett Pay}} scheme the Employee Percentage should increased to a {{DataValue|3%}} contribution.The Employer contribution should be increased to {{DataValue|2%}}.
 
  
 
== See also ==
 
== See also ==
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* [[How do I Prepare for Automatic Enrolment?]]
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* [[How do I prepare for automatic enrolment?]]
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* [[How do I Add Pension Company Details to my Pension Letters?]]
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* [[How do I add pension company details to my pension letters?]]
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* [[How do I Edit my Auto Enrolment Letters?]]
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* [[How do I edit my auto enrolment letters?]]
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* [[Links to Pension Providers]]
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* [[Links to pension providers]]
  
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{{KB_Tags|Pension, scheme, payroll, Parameters, auto enrolment, auto enrol, nest, royal london, now, people's pension, peoples pension, increase, phasing, update}}
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{{KB_Tags|pension, scheme, payroll, parameters, auto enrolment, auto enrol, nest, royal london, now, people's pension, peoples pension, increase, phasing, update}}
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{{KB_PR}} {{ZN_Admin}}
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{{How}}{{KB_PR}}{{ZN_Admin}}

Latest revision as of 15:07, 3 May 2022

Summary

The following article explains how to set up Pension Schemes, including Auto Enrolment Schemes. This enables the system to calculate contributions correctly.

More Information

Go to " " Reports & Settings Maintenance Options System Administrator Module Settings" Payroll Module Settings"

  • Scroll down to the "Pension Schemes" section.

What do I need to know?

The information that you need to create a pension scheme should be provided by the people who arranged the pension scheme for you, and any questions should first be aimed at them. Please make sure you have these details:

  • The Pension Company.
  • Which Earnings Limits apply, e.g. Qualifying Earnings.
  • Whether it is a 'Relief at Source - Net Contributions' or 'Nett Pay - Gross Contributions' scheme.
  • Whether the settings differ for Employee and Employer.

Pension Details

For each applicable pension scheme, complete the relevant information.

Click on "Pension Description" then click [Edit].

  • Enter the name of the scheme, max 15 characters, e.g. 'NEST'
  • Click [Done].

Click on "Employee percentage" then click [Edit].

  • Specify if the employee deduction will be a percentage ('Y') or specified amount ('N').
  • Click [Done].

Click on "Employee amount" then click [Edit].

  • Depending on your choice for the previous flag enter the employee deduction.
For a 'Relief at Source' scheme, for the 2022-2023 tax year ending on the 5th April 2022 the Employee Percentage remains at '4%'. This takes account of the 20% tax relief on the employee contribution that the pension company will claim from the government which makes up the balance of the 5% Employee contribution.
For a 'Nett Pay' scheme, for the 2022-2023 tax year ending on the 5th April 2021 the Employee Percentage remains at '5%'.
  • Click [Done].

Click on "Employee limit" then click [Edit].

  • Select the NI Limit to apply to the scheme.
    • 'None' - Calculate the pension on the whole pensionable gross.
    • 'NI Lower Earnings' - Apply the NI Lower Earnings Limits (2022/2023 rates)
    • 'NI Upper Earnings' - Apply the NI Upper Earnings Limits (2022/2023 rates)
    • 'NI Both' - NI Qualifying Earnings i.e. NI Upper & Lower Earnings Limits (2022/2023 rates)
    • 'DWP Lower Earnings' - Apply the DWP Lower Earnings Limits (2022/2023 rates)
    • 'DWP Upper Earnings' - Apply the DWP Upper Earnings Limits (2022/2023 rates)
    • 'DWP Both' - DWP Qualifying Earnings i.e. DWP Upper & Lower Earnings Limits (2022/2023 rates)
  • Click [Done].

Click on "Employer percentage" then click [Edit].

  • Specify if the employer deduction will be a percentage ('Y') or specified amount ('N').
  • Click [Done].

Click on "Employer amount" then click [Edit].

  • Depending on your choice for the previous flag enter the employer deduction.
For the 2022-2023 tax year the Employer contribution remains at '3%'.
  • Click [Done].

Click on "Employer limit" then click [Edit].

  • Select the NI Limit to apply to the scheme.
    • 'None' - Calculate the pension on the whole pensionable gross.
    • 'NI Lower Earnings' - Apply the NI Lower Earnings Limits
    • 'NI Upper Earnings' - Apply the NI Upper Earnings Limits
    • 'NI Both' - NI Qualifying Earnings i.e. NI Upper & Lower Earnings Limits
    • 'DWP Lower Earnings' - Apply the DWP Lower Earnings Limits
    • 'DWP Upper Earnings' - Apply the DWP Upper Earnings Limits
    • 'DWP Both' - DWP Qualifying Earnings i.e. DWP Upper & Lower Earnings Limits
  • Click [Done].

Click on "Tax relief"

  • Select the type of scheme and click [Done].
Click this link to check the definition of the type of scheme you are involved with Workplace pensions and tax relief. Queries regarding claiming tax back should be aimed at your Pension Provider.
You must ensure you check your settings and seek clarification from your pension provider and/or accountant if you are unsure of the type of scheme you have enrolled in.

Automatic Enrolment Scheme

  • Select "Automatic Enrolment Scheme" and click [Edit].
  • Choose the number of the scheme then click [Done].

Employer's Duty Start Date (Staging Date)

If not already specified, select this option and enter the date your company joined automatic enrolment.

  • Click [Done].
Please note your re-enrolment date will be based on this date so please ensure it is accurate.
  • To save your settings click [Done] and [Accept].

Allocating a Scheme to an Employee

To allocate an individual Pension Scheme to an employee, go to the [TAX, NI & Pension] page in the Employee record. You can amend the default Employee and Employer's contribution if necessary. You can also enter voluntary top up contributions for both the Employee and the Employer if applicable.

This is not necessary for Automatic Enrolment schemes. The system will set the scheme for you when the first period of enrolment is closed.

For advice or clarification of auto enrolment schemes please speak to your pension provider or view The Pensions Regulator for advice.

See also


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