Brief Guide to Auto Enrolment
Auto-enrolment is a legal requirement for UK businesses to provide a Qualifying Workplace Pension Scheme to eligible employees, with employer and employee contributions calculated correctly.
Elements of Auto-Enrolment
- Your staging date — when you must start complying with your duties
- Identifying eligible employees
- Calculating contributions correctly
- Understanding the "waiting period" or deferment
- Employer duties and ongoing administration
Employee Categories
- Eligible jobholders — earning at least £10,000 a year and aged 22 to State Pension age — must be automatically enrolled
- Non-eligible jobholders — earning between the lower and higher thresholds — can opt in, with employer contributions
- Entitled workers — earning below the lower threshold — can join a scheme, though employers aren't required to contribute
Employer Duties
- Choose a qualifying pension scheme if you don't already have one
- Provide staff details to your pension provider and/or payroll administrator
- Tell staff who is eligible, who isn't, and their right to opt out
- Process opt-out notices and stay in contact with your pension scheme provider
- Keep accurate records and issue the required letters to staff
Failure to comply with auto-enrolment carries penalties of up to £2,500 a day, so it pays to get this right from the outset — we're happy to help you assess your staging date and set everything up correctly.