Employers are often under a mistaken belief that they have to provide a pension for their employees, or make contributions to the employees own pension scheme. 

Currently there is no legislation that actually requires employers to make any such pension provision at all.  Employers have complete discretion over whether they provide a pension or not (a decision based most likely on an ability to pay).

This however is changing due to the implimentation of the Pensions Act 2008, and starting in October 2012 for large employers (it will be more likely 2015 - 2016 for small employers with less than 50 employees) for the first time ever there will be a compulsory scheme in place that will require ALL employers to automatically enroll qualifying employees in a workplace pension scheme AND make minimum financial contributions to it. 

The minimum contributions to the Pension scheme must total 8% of qualifying earnings. This will be made up of 3% from the employer, 4% from the employee and 1% in tax rebate.  Contributions levels can be higher if either the employer or employee agree. 

As this will start to come into effect for most Groups as from 2015 (ish), if they are appliying for any grant funding, they will need to be aware of the future budget constraints that these contribution levels will impose.

The following CA Plus Advice Guide provides some further pensions information in more detail for you.

Pensions Advice Note (Word)
Pensions Advice Note (PDF)