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Auto-enrolment makes it easier for people to save money for their retirement. It means that every employer must automatically enrol eligible staff into a qualifying pension scheme.
To comply with the new pension reforms, employers will have to:
If you already have a defined contribution workplace pension scheme you need to check with the Pensions Regulator if you can use it for auto-enrolment.
If you already run a stakeholder pension you still have to operate it if your existing members want it. However, you don't have to offer it to other workers.
You must automatically enrol all staff who are:
Some staff who don't meet the criteria can also opt in to auto-enrolment. If they choose to opt in, you have to enrol them.
Auto-enrolment requires employers to make a minimum contribution, which is a percentage of an employee's qualifying earnings.
The minimum contribution is 5% with at least 2% coming from the employer. The minimum employer contribution increases to 3% from 2019/20.
You need to write to all staff to tell them how they are affected by auto-enrolment.
Staff can choose to opt out of your pension scheme after they have been automatically enrolled. Those who want to opt out will have to complete a form from the pension scheme provider and give it to you.
Once you've set up your pension scheme you need to register it with the Pensions Regulator and provide details of your pension scheme, including the number of people enrolled. This can be done online at the Pensions Regulator website.
NEST (National Employment Savings Trust) is a pension scheme set up by the government and is designed to help employers meet their auto-enrolment obligations.
Employers are free to choose which qualifying scheme they use but the NEST scheme is specifically designed to help smaller employers meet the requirements of auto-enrolment.
Contact us to discuss your obligations for auto-enrolment.