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A Detailed Summary of Auto-Enrolment

Under the Workplace Pension Reforms, all employers must place their employees (who meet certain requirements) into a pension scheme and make regular contributions to this pension scheme

Members of staff can opt out of this pension scheme but only after they have been enrolled. 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 in writing.

A system of fines has been introduced for firms who do not comply to the rules of Auto-Enrolment.

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:

  • How do you sell the benefits of joining a pension scheme to your employees?
  • Do you know if your staff will lose ‘enhanced protection’ if they are automatically enrolled into the workplace pension scheme?

Consider the costs:

  • Do you know what the cost to your business will be if all your employees joined an existing scheme?
  • Have you heard of the Alternative Quality Test?
  • How can you reduce the cost of pension scheme administration and implementation?
  • How much internal resource is needed for implementation or maintain workplace pensions?

Any worker earning over the ‘earnings trigger for automatic enrolment’* 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 are not automatically enrolled but earn over the ‘lower level of qualifying earnings’*, 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.

*Every year, the Department for Work and Pensions (DWP) reviews the earnings thresholds for automatic enrolment. The latest information can be found on the Pensions Regulator website.

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.