Auto Enrolment

Workplace Pension Auto-Enrolment – Employer Overview

Workplace pension auto-enrolment is a legal requirement for all UK employers, regardless of size, from the point they employ their first worker.

There are no staging dates. Employer duties apply immediately and continue on an ongoing basis. The Pensions Regulator (TPR) oversees compliance.

 

What employers must do

Employers are required to:

• Assess their workforce
• Automatically enrol eligible workers
• Make and deduct pension contributions
• Communicate with workers
• Keep accurate records
• Re-enrol eligible workers every three years
• Complete declarations of compliance with TPR

 

Assessing your workforce

All individuals who work for you must be assessed to determine whether they qualify as a worker for auto-enrolment purposes. This may include:

• Employees
• Temporary staff
• Contractors and agency workers (depending on contractual terms)

Workers are assessed based on age and earnings.

Types of worker

Eligible Jobholders

• Aged 22 to State Pension Age
• Earn above the auto-enrolment earnings trigger
  ➡ Must be automatically enrolled into a qualifying pension scheme

Non-Eligible Jobholders

• Either earn above the trigger but are outside the age range, or
• Are aged 22 to State Pension Age and earn above the lower earnings limit but below the trigger
  ➡ Have the right to opt in

Entitled Workers

• Aged 16–74
• Earn below the lower earnings limit
  ➡ Have the right to join a pension scheme (no mandatory employer contribution)

 

Contributions

The minimum contribution requirement is 8% of qualifying earnings, made up of:

• At least 3% employer
• Up to 5% employee

Qualifying earnings include salary, wages, bonuses, commissions, overtime and statutory payments. Earnings thresholds are reviewed periodically by the government.

 

Postponement

Employers may postpone assessment and enrolment for up to three months from:

• The date duties start
• A worker’s first day of employment
• The date a worker becomes eligible

A postponement notice must be issued within six weeks and one day.

Workers retain the right to opt in or join during postponement.

 

Declarations of compliance

Employers must submit a declaration of compliance within five months of duties starting, and a re-declaration every three years, even if no workers are enrolled.