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Here is a presentation on Workplace Pensions and Automatic Enrolment Duties.

To start the presentation, click here.

  • A pension is something arranged by the employer as an additional way to encourage individuals to save money towards their future retirement.
  • With pension schemes, a designated percentage of staff salary is put into a personal ‘pension pot’ every time they are paid, and the employer also contributes a designated percentage on top of this.
  • The government decides the minimum contributions to be made – employers may offer more generous schemes if they wish to offer additional staff benefits.
  • Under the Pensions Act 2008, every UK employer must register staff in a workplace pension scheme and make contributions towards it. The term for this is ‘automatic enrolment’. If you employ at least one person you are an employer, and will need to carry out specific legal duties. Employers | The Pensions Regulator
  • The Pensions Regulator is the public body that protects workplace pensions in the UK. They work with employers and pension providers so that people can save safely towards their retirement.
  • The Pensions Regulator has published a guide containing essential, detailed information for employers on their duties regarding automatic enrolment: The Pensions Regulator – Essential guide to automatic enrolment
  • The purpose of this presentation is to give an overview of your duties. You should refer to the Pensions Regulator for full information regarding your duties.
  • Every employer must comply with automatic enrolment requirements. The Pensions Regulator website has information, guidelines and templates to help new employers learn their duties and how to comply with them.
  • The website has a questionnaire to enable new employers to understand their duties. Most new employers will need to take 4 steps:

»  Choose a pension scheme

»  Discover who you should enrol in the pension scheme

»  Write to your employees

»  Complete a Statement of Compliance

  • Detailed guidelines for each of the above steps, including letter templates in Welsh, are available on the website: Employers | The Pensions Regulator
  • If an employee is between 22 and state pension age, and if they earn £833 per month (£192 per week) or more, they must be automatically enrolled into a pension scheme.
  • Note that anyone may opt in, although they may not meet the criteria for automatic enrolment.
  • The employer does not have to make contributions if the worker earns less than £520 per month (£120 per week) as this is thethreshold for ‘Qualifying Earnings’.
  • For most employers, the payroll administrator will take responsibility for assessing workers, calculating contributions, paying contributions into the pension scheme and corresponding with workers – check with your payroll company exactly what they do on your behalf.
  • Since April 2019 the minimum pension contribution is 5% from the employee and 3% from the employer, with contributions based on ‘Qualifying Earnings’.
  • ‘Qualifying Earnings’ = between £520 and £4,189 per month
  • Example: if an individual earns a gross salary of £1,200 per month, then their pension contribution for that month will be:

»  Employee contribution: (£1,200 – £520) x 5% = £34.00

»  Employer contribution : (£1,200 – £520) x 3% = £20.40

  • (Note that this is the minimum contribution to be paid. It is possible to make contributions based on total gross monthly salary, but the cost of this pension will obviously be higher.)
  • Note that the government occasionally changes these percentages, so it is important to keep an eye out for any announcements regarding this. We will annually update any percentages or thresholds in the ‘Pay Rates, statutory pay and thresholds’ Presentation, or you may see the latest thresholds on the Pensions Regulator website: Making contributions to your pension scheme
  • Pay pension contributions to the pension company every time staff are paid.
  • Assess any new staff members at the start of their employment to see whether they are eligible, and inform them of their rights.
  • Re-assess everybody every three years and send the appropriate letters.
  • Continual assessment – assessing any staff member that was not eligible at the start of their employment (due to age or salary) every time they are paid to see whether they have become eligible and need to be automatically enrolled.