A Detailed Summary of Auto-Enrolment
What is Auto-Enrolment?
- Under the Workplace Pension Reforms, all employers will have to place their employees (who meet certain requirements) into a pension scheme and make regular contributions to this pension scheme
- Members of staff will be able to opt out of this pension scheme but if they do not opt out then they must automatically remain in the scheme
- Staff members must be told of their right to join your pension scheme
- A system of fines will be introduced for firms who do not comply to the rules of Auto-Enrolment.
Your Auto-Enrolment action checklist:
Our experts have put together the following action checklist that outlines the key issues you must consider now, even if your staging date remains relatively far off.
After reading this guide, you should be able to answer all of these questions in the affirmative. Should you still have any outstanding queries, please do not hesitate to contact us.
Complying with the reforms:
- Are you aware of your duties start date? Do you know what you are required to do by this date?
- Could you identify which members of staff need to be included in your pension scheme?
- Do you know the rules regarding recruitment of staff that are already in force?
Dealing with your employees:
Have you considered:
- How you will sell the benefits of joining a pension scheme to your employees?
- Do you know if your staff will lose ‘enhanced protection’ if they are auto-enrolled?
Consider the costs:
- Do you know what the cost to your business will be if all your employees joined an existing scheme?
- Have you started to plan for the costs of Auto-Enrolment yet?
- Have you heard of the Alternative Quality Test?
- Will you plan to reduce the cost of pension scheme administration and implementation?
- How much internal resource will be needed for implementation?
- Have you determined who will be your key person in response to the changes?
Who must be automatically enrolled into a pension plan?
Any worker earning over £10,000* per year and aged between 22 and state pension age must be automatically enrolled by their employer into a pension plan.
You should also note that any of your employees who earn over £6,240*, who are not automatically enrolled, can ask to join the pension plan. You are obliged to make people in this bracket aware that they can join the scheme.
Your Auto-Enrolment duties begin on the start date of your first employee, this is known as your duties start date.
(*as of April 2022)
Should you have any queries or would like further advice about meeting your Auto-Enrolment obligations, do not hesitate to contact Ashley Bellis or our other Auto-Enrolment specialists to the right of this page.