In the past, many workers missed out on valuable pension benefits, because their employer didn’t offer them a pension or they didn’t apply to join their company’s pension scheme.
Automatic enrolment changed this. It makes it compulsory for employers to automatically enrol their eligible workers into a pension scheme. The employer must also pay money into the scheme.
Automatic enrolment was phased in from 2012, starting with the largest UK employers. All eligible workers should have been automatically enrolled in their employer’s workplace pension scheme by 1 February 2018.
What is Automatic Enrolment?
Automatic enrolment was introduced in 2012 and employers and their existing staff has been brought into workplace pensions through a series of stating dates.
If you are an employer you must put certain staff into a pension scheme and contribute towards it. If you employ at least one person you are an employer and you have certain legal duties as set out in the Pensions Act 2008.
Not sure whether you need to enrol your staff?
Your staff may be subject to the legislation if they are:
- Aged 16 to 74 (inclusive), and
- Work or ordinarily work in the UK
This applies to staff whether or not they are full time, part time, permanent or temporary.
Who is exempt from automatic enrolment duties?
The Pensions Regulator states that the following are exempt:
- Directors not working under an employment contract;
- A director who is working under an employment contract, where they are the only employee in the company - but only for the work they carry out for that company;
- Office-holders who are not considered workers (eg non-executive directors, trustees, elected members) - but they are only excluded for the activities they carry out as an office holder;
- The (truly) self-employed.
Declaration of Compliance
This is a simple online form that you must submit to let The Pensions Regulation (TPR) know how you have met your legal duties for auto-enrolment.
Visit www.tpr.gov.uk/online-declare to complete the declaration to avoid a fine!