Auto-enrolment

To help people save more for their retirement, the government now requires employers to enrol their workers into a workplace pension scheme.

This applies to those who aren’t already in one and who:

  • Earn over £10,000 a year (£833 per month, £192 per week)
  • Are aged 22 or over; and
  • Are under State Pension Age

Each employer has a Staging Date – the date from when they must comply with the legislation and auto enrol employees into a workplace pension scheme. The dates start from 1 October 2012 for the largest employers, and go on until 2018 for employers with less than 50 workers. The actual date will depend on the employer’s PAYE reference. For those employers with workers over 50, the staging date will be dependent on the number of workers as at 1 April 2012, with additional dates for new employers.

Contributions to the Workplace Pension scheme can be staged in starting at 1% from the employer and 1% from the worker, increasing to a minimum of 3% from the employer and 5% from the worker by 2018.

What do employers need to do?

  • Find out your staging date using your PAYE reference
  • Check which workers meet the automatic enrolment criteria
  • Check your payroll software functionality
  • Check if an existing pension scheme can be used
  • Provide the pension scheme with details of workers to enrol
  • Provider workers with details of the scheme membership, contributions, deductions
  • Register the scheme with The Pensions Regulator and keep records
  • Arrange for pension contributions to be paid to the pension provider

And workers?

  • Contributions will be deducted automatically via payroll
  • These contributions will be deducted net of basic rate tax
  • Workers do have an option to opt out but this is not done via the employer but via the pension scheme administrator

If you require further information or assistance please contact us.