There are three classifications of employee in your business under the new auto-enrolment rules. These are:
- Eligible Jobholders
- Non-eligible Jobholders
- Entitled Workers
The Eligible Jobholder is the type of defined ‘Worker’ that must be offered an auto-enrolment pension scheme, unless your existing pension scheme is a Qualifying Scheme (see here). These are workers who:
– are aged between 22 and state pension age
– are working or ordinarily work in the UK under their contract
– have qualifying earnings in the relevant pay reference period that are above the earnings trigger for automatic-enrolment – currently £10,000 (for 2015/16).
The two other staff categories
The other two types of Worker, as defined by the Pensions Regulator, that Employers have a duty towards are:
Non-eligible Jobholders – these are Workers who:
- Have earnings below the earnings trigger for Automatic-enrolment – currently £10,000 – but above the lower earnings threshold – currently £5,824, or
- Are aged between either 16 – 21, or State Pension Age to 74
These staff have a right to opt-in and the Employer must pay a contribution for them.
Entitled Workers – these are Workers who:
- Have earnings below the lower earnings threshold – currently £5,824 –ages 16 or above but below 75
These staff have a right to opt-in, but the Employer does not need to pay a contribution for them, unless it’s part of their contract.