Workplace Pensions

Auto-enrolment – what it means for Employers & Staff

Auto-enrolment encompasses the UK rules for workplace pension benefits.  These rules apply to all Employers with staff in the UK, with effect from October 2012.  Between 2012 and 2016,  the new rules applied to each and every employee of a business, however small.

Auto-enrolment means that every Employer has to automatically enrol and deduct contributions from each worker to be invested into a Qualifying Workplace Pension Scheme, unless that Employer already has a Qualifying Workplace Pension Scheme.

Every UK Employer has an official start date for Auto-enrolment and this depends upon its number of employees (even if that’s just 1 Director).

The start date for each Employer is known as its “Staging Date” and this will be advised in writing by the Pensions Regulator between 6 and 12 months prior to the date and again 3 months prior.

Failure to comply with the new rules is a criminal offence, with additional fines of up to £10,000 per day. Enforcement has been delegated to The Pensions Regulator, who will operate a combination of electronic checks and, where deemed necessary, face-to-face visits with Employers.

The UK Government’s whole future strategy on pension provision depends upon the success of Auto enrolment, hence putting in place strict enforcement rules to make sure the whole structure works.  The ageing population and its much longer life expectancy means that it is imperative Auto enrolment is also seen to work too.