The basics
Automatic enrolment affects all employers with staff in the UK.
Staff meeting the criteria must be entered into a pension scheme.
Employers must start doing this from their staging date.
Employers must write to all staff to tell them how they’ve been affected.
What is automatic enrolment and why do I have to do it?
The law on workplace pensions has changed to make it easier for people to build up a pension. People in the UK are living longer, yet too many people are under-saving or not saving at all for what could be a long retirement.
Automatic enrolment means that, rather than having to actively choose to join a pension scheme, staff are put into one by their employer as a matter of course. However there is an opt-out option, should the employee wish.
When will I have to take action?
Automatic enrolment duties come into force for the employer on their ‘staging date’. Don’t know your staging date? Call us on 0113 2864486 and we will tell you.
Who is put into a pension scheme?
Staff will be automatically enrolled who are:
- aged 22 to state pension age
- working in the UK
- earning over £9,440 a year.
Some staff who don’t meet the criteria above are able to opt in to the employer’s pension scheme that is being used for automatic enrolment.
Employers have to pay a minimum employer contribution for all staff that are automatically put into this scheme.
Certain other staff can ask to join a pension scheme. The employer must put these staff in a scheme, but the rules are different and there’s no requirement for an employer contribution.
Employers – Where do I start?
The first thing you should do is find out your staging date. Once you know when this is, you can start planning to make sure you’re ready in time.
Start planning early … You’ll need to make some changes to allow for automatic enrolment, such as:
- setting up a pension scheme or modifying an existing one
- making any necessary changes to payroll so it can handle the new requirements
- putting systems in place to monitor the ages and earnings of your staff
- writing to your staff.
If you have any questions please contact us on 0113 2864486.
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