Auto enrolment of pensions, the essentials

2016-04-20 Jennifer Renney-Butland posted:

Many small businesses will have a deadline of 2016 or 2017 to enrol their eligible workers into a workplace pension if they are not already in one. The staged enrolment process started in 2012 and will run until the end of 2017.

The Pensions Regulator is writing to employers 12 months before they are due to implement the scheme. However, it is best practice to start planning earlier than 12 months due to the time it is taking to get ready for auto-enrolment.

What do you need to do? Employers should:

  • identify their staging date for implementing the new regime
  • review the workforce to identify which workers must be enrolled automatically (this can be carried out by payroll suppliers or specialist third-party software)
  • review their current pension arrangements and any benefit design issues
  • put key support structures in place, and
  • plan communications with their workers

Who is eligible? Employers should note that workers to be enrolled under the scheme will:

  • be at least 22 years old
  • not have reached state pension age
  • earn more than the earnings trigger
  • work, or normally work in the UK

How much will it cost? Once employers have enrolled in the scheme they have to pay a minimum of 1% contribution towards the workers’ pension unless the worker chooses to opt out of the pension scheme.

Can we opt out? Workers may choose to leave or opt out of the pension scheme at any time by signing an opt out form. If any worker opts out within a month of joining the scheme any money paid in will be paid back to them. If opting out any later then it will depend on the pension scheme's rules, normally this will mean it stays in the pension until such a time an income is taken.

Still confused? If you have any queries regarding this scheme or you would like to review your current pension arrangements or your contracts of employment and policies, please get in touch.

Share this post

Sign Up to Our Newsletter

Share this post


And we're out with update 5 - read on for guidance on updates to the furlough scheme and how holiday/annual leave…mg


There have been some developments on the job retention scheme (the furlough scheme), which has now been extended…YB


With changes happening on a daily basis due to #COVID19 I've had lots of questions from both employers and…Nm


Faced with a new employment situation Jennifer Renney guided us through requirements and contract with a minimum of fuss. Very satisfied with the service provided. Thank you Renney and Co. Aquae Sulis Hotel.

Jane Carnegie


Thank you very much for all your help. I really wasn't sure my employer was going to agree to the settlement, but we have managed to achieve the best possible outcome and for that I am grateful.

Client on 10th August 2015