Many organisations will already have auto enrolled their eligible staff into pension schemes, but below are set out the key points as a general reminder.
All employers are required to automatically enrol their UK workers into an occupational or personal pension scheme, driven by the organisation’s ‘staging date’. The largest employers should have completed this from October 2012, with all employers phased in by the end of February 2018.
Workers can opt out of the pension scheme once they have been auto enrolled, but they cannot be incentivised by the employer to do this.
In addition, any worker who opts out, must be re-enrolled every three years and can then choose to opt out again.
Eligible workers are those who are aged at least 22 with earnings over £10,000 per annum. For such workers, employers have to:
- Contribute a percentage figure of their gross earnings between £5,824 and £43,000. The compulsory contributions are being phased in from 1% now, increasing to 2% in 2018 and 3% in 2019; or
- Offer a suitable defined benefit scheme; or
- Make alternative contribution arrangements satisfying certain minimum requirements.
Employers can delay enrolment of new workers until they have been employed for three months, although they must enrol them if the worker chooses to opt in earlier.