The Pensions Act 2008 set out that every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it. This is called ‘automatic enrolment’. If you employ at least one person you are an employer and you have certain legal duties.
The aim of a workplace pension is a way of saving for retirement and that’s arranged by the employer. Some workplace pensions are called ‘occupational’, ‘works’, ‘company’ or ‘work-based’ pensions.
The Pensions Regulator acknowledges that Auto Enrolment represents a massive cultural change in the UK, with the aim of improving the standard of living of all those in retirement. This is a long-term ambition in which providing a pension for employees has simply become a part of being an employer in the UK.
When auto enrolment was rolled out across the UK, employers were given a ‘staging date’ based on their number of employees. All employers have now passed their staging date and have declared their compliance with The Pensions Regulator. For new employers, their legal duties begin on the day their first member of staff starts work, known as the ‘duties start date’.
If an employee is aged between 16 and 75, they are able to join the pension scheme at any time. As long as they earn a minimum of £6,240 a year (equal to about £520 a month or £120 a week), the employer will have to contribute from the time they join. If an employee earns less than this, the regulations mean that they will not be entitled to contributions from the employer.
As an employer, on your duties start date, you will need to automatically enrol your employees into a pension if they are:
If employees do not meet these criteria on your duties start date, but they do in the future, you will need to automatically enrol them at that point.
Also an employer does not have to automatically enrol an employee if any of the following apply: