Pension Auto-Enrolment - Non-Executive Directors Beware!

Only this week we have had a number of discussions with clients, who hold non-executive directorships, who were unaware that by automatically becoming a member of a pension scheme they could seriously affect their own pension arrangements.

This is because of the roll-out of auto-enrolment pensions (a new law requiring every employer to automatically enrol workers into a workplace pension scheme).

We are therefore advising all of our clients who have substantial pension benefits, protected lifetime allowances (the maximum you are permitted to have in pension assets by value without a future tax charge) and have one or more Non-Executive Directorship (NED) roles to check this out with their respective payroll departments.  This is to ensure they are not automatically enrolled in a pension scheme.

There are exemptions in place that are likely to cover most NEDs, however our concern is whether our clients, and the companies they are working with, are aware of these exemptions.  If they are not, there is a chance they could inadvertently become members of a pension scheme.

For clients who have protected lifetime allowances (potentially uncapped), being auto-enrolled could result in the loss of this protection and a reduced lifetime allowance of £1.25m.  In monetary terms this could easily lead to a six figure future tax charge!

Please do give us a call if you are a NED and please click on the link below if you would like to learn more on this and other planning ideas to consider before 5 April 2014.

Click here for 10 Planning Ideas to do before 5 April 2014.

Antony Summers
Private Client Partner

Telephone: +44 (0)20 7893 3456
Email:  getintouch [at] broadstoneltd.co.uk