What is Automatic Enrolment?

What is Automatic Enrolment?

UK employers have to automatically enrol their staff into a workplace pension if they meet certain criteria. The law on workplace pensions has now changed and every employer must comply.

This means that employers will need to automatically enrol some workers into a pension scheme and give other workers the option to join. This is happening on a phased basis, based on the size of the workforce from October 2012.

As an employer, your duties around Automatic Enrolment apply to everyone working for you who:

• is aged between 16 and 74 
• works in the UK 
• for whom you deduct income tax and National Insurance contributions from their wages.

You’ll need to assess your workforce to determine whether they’re classified as a ‘worker’. There are three different categories of worker for Automatic Enrolment purposes, determined by their age and how much they earn.  The actual duties of the employer is dependent on the category of worker;

• Eligible Jobholder
• Non-Eligible Jobholder
• Entitled Workers
  

Exclusions to the employer duties for Automatic Enrolment

People who ARE treated as workers

The following people are treated as workers but are not covered by the employer duties:

• those who do not work or ordinarily work in the UK
• those under age 16 and
• those aged 75 and over.

People who ARE NOT treated as workers

The following people are not treated as workers so the employer duties don’t apply to them:

• the self employed
• members of the armed forces
• directors of companies unless they have a contract of employment to work for that company and there is someone else employed by the company under a contract of employment.

When will AE apply to you?

The date your employer duties first apply is known as your staging date and it’s based on the number of people in your largest Pay As You Earn (PAYE) scheme on 1 April 2012.

If you don’t already offer workers a workplace pension scheme, you must set one up before your business’ staging date. To find your staging date simply click on this link to The Pension Regulator Staging Date Tool

All you need is your employer PAYE reference.

All employers are required to register with the regulator within five months of their staging date, even if they have no employer duties for their staff.

If you don’t already offer workers a workplace pension scheme, you must set one up before your business’ staging date.
If you already have a workplace pension scheme, check if you can use it for automatic enrolment; The Pension Regulator - Pension Scheme Requirements Guidance