The key Employer duties under auto-enrolment are to:
- provide a qualifying scheme for its Workers- automatically enrol all Eligible Jobholders into the scheme within a maximum period of 3 months from their joining date- deduct Member and pay Employer contributions for all Eligible Jobholders to the scheme.
- tell all Eligible Jobholders that they have been automatically enrolled, and they have the right to opt out if they want to do so- register with the Pensions Regulator within 4 months, providing details of any qualifying scheme and the number of people automatically enrolled.
- ensure that all duties in respect of Non-eligible Jobholders and Entitled Workers are complied with and that those relevant are auto-enrolled as appropriate.
- provide all relevant Workers with detailed information about the duties under Auto-enrolment.
- allow – upon request – all Entitled Workers to join a Qualifying Workplace Pensions Scheme- collect Member contributions to send over to the Qualifying Scheme on the Members’ behalf, including any relevant Employer contributions.
- put into the Qualifying Scheme any non-Eligible Jobholders who have decided to opt in, collect Member and make Employer contributions to the Scheme.
- remove from the Qualifying Scheme anyone who has decided to opt out within the opt-out period and promptly refund their contributions.
- every three years, notify and automatically re-enrol on an individual basis each of those Eligible Jobholders who have opted out of the Qualifying Scheme and did not join another Scheme.
- renew registration with The Pensions Regulator after re-enrolment.
Keeping auditable records for every pay period proving:
- all Staff have been assessed at every single payroll period (be it weekly or monthly) as to whether they are Eligible Jobholders at that point in time;
- all Staff have been assessed at every single payroll period (be it weekly or monthly) as to whether they are Entitled Workers at that point in time;
- they hold a comprehensive record of all those employees recorded as non-Entitled Workers and confirmation of continued non-entitlement for each and every pay period;
- what action was necessary and what action was taken after each assessment payroll period, by way of auditable record, for each category of Staff: Eligible Jobholders, Non-eligible Jobholders, Entitled Workers.
Before its Staging Date, each Employer must identify which of their employees are to be automatically enrolled into their Qualifying Workplace Pension Scheme. This means classifying each and every employee into a worker type, of which there are three:
1) Eligible Jobholders – these are workers who:
– Are not already in a Qualifying Workplace Pension Scheme;
– Are at least 22 years old;
– Have not yet reached State Pension Age;
– Earn more than the Auto-enrolment ‘Earnings Trigger’ (currently set at £10,000).
The employees who fit the above definition must be automatically enrolled into a Qualifying Workplace Pension Scheme. Into this Scheme, at least minimum contributions must be paid by both the Employer and the Member (employee / worker).
2) Non-eligible jobholders – these are workers who:
– Are aged between 16 and 21 or between State Pension Age and 74
– Earn more than the NIC Lower Earnings Limit (currently £5,876) but less than the Earnings Trigger (currently set at £10,000)
Again, if this category of worker elects to be automatically enrolled, at least minimum contributions must be paid.
3) Entitled Workers – these are workers who:
– Earn less than £5,876 (the NIC Lower Earnings Limit), and
What Employers must not do!
- encourage workers to opt out of the qualifying pension scheme.
- have recruitment practices that will benefit job applicants who indicate they are prepared to opt out.
- treat a worker unfairly or put them at a disadvantage because of automatic enrolment.