Auto Enrolment For Employers

The government has decided that every employer has to offer a work place pension and make contributions to it on behalf of their employees.

Auto-Enrolment duties come into force from your staging date.

You must automatically enrol all staff who are:

  • Aged 22 to state pension age
  • Working in the U.K
  • Earning over £10,600 a year

Some staff will not meet the above criteria but are able to opt into the pension scheme you are using for automatic enrolment. You must put them in if they ask.

Automatic enrolment is not just something that happens at your staging date, it is an ongoing duty. You will need to check every pay day to see if any of the members of staff who weren’t automatically enrolled are now entitled to be put into the pension scheme (for example if they have reached their 22nd birthday)

After you have automatically enrolled your staff members, they may ask to opt out of the pension scheme. You must then stop deductions of contributions and arrange a refund of any contributions they have paid to date.

For automatic enrolment there are minimum contributions you must pay in order to comply with your duties.

These are a percentage of earning and are shown in the table below.

DATE EMPLOYER MINIMUM CONTRIBUTION TOTAL MINIMUM CONTRIBUTION

Before 30/09/17

1 % 2 %

01/10/17 – 30/09/18

2 % 5 %

01/10/18 onwards

3 % 8 %

You must select a pension scheme which meets certain legal requirements, you should also chose a good quality scheme that is well run, offers value for money and protects you workers retirement savings. We can offer advice on choosing the right scheme for your employees and send out the necessary letters to employees when applicable.

If you are confused about your legal requirements for auto enrolment, please visit The Pensions Regulator, or contact us for more advice.