By 2018 all employers must provide a workplace pension scheme. This is called ‘automatic enrolment’. Further guidance can be found on the Pensions Regulator website:
Individual Pension schemes such as Nest or Now also have useful guidance on their sites.
Failure to enrol eligible employees in a pension scheme could result in a fine.
An employer should assess all employees to see if they need to enrol them and make contributions. They must enrol employees into a scheme if the following apply:
- Classed as Worker
- Aged 22 to State Pension age
- Earn at least £10,000 per year
- Usual place of work is UK
Employers can postpone the date they enrol workers, usually by up to 3 months, but workers have the right to opt in from their first month of employment. If an employer wishes to use postponement they must notify the employee in writing.
Some people are out of scope for auto-enrolment such as directors or ltd companies. However, it is advisable to assess everyone to ensure obligations are met in all cases.
If an out of scope individual wishes to opt in they have the right to and cannot be refused.
Employees earning less than £503 pm/£115 pw/£464 per 4 weeks don’t have to be auto-enrolled (2018/19)