What are you preparing for?

The Pensions Act 2008 has changed your employer duties, meaning:

1. 1.

   You must enrol all eligible workers into a workplace pension from your staging date.

2. 2.

   Other non-eligible employees must be told about either opting into the auto enrolment pension scheme or paying into a separate pension altogether.

To do this, you need assess your workforce to find out who is eligible for which option.

How to assess your workforce?

You must follow the new employer duties if you employ at least one person from the following:

• An employment contract with you

• A contract to perform work for you, but not as part of their own business

What type of workers do you employ?

Employer duties apply to each type of worker, and you will need to provide evidence to The Pensions Regulator of each individual employee.

Who is an eligible jobholder?

Any employees who fit the following criteria:

• At least 22 but under state pension age

• Earns more than £10,000 a year*

• Works in or normally works in the UK (as part of their contract)

Who is a non-eligible jobholder?

Any employee who fits all of the following criteria:

• Aged between 16 and 74

• Earns between £5,824 and £10,000 a year

• Works in or normally works in the UK under their contract

Or

• Aged between 16 and 21, or between the state pension age and 74

• Earns more than £10,000 a year

• Works in or normally works in the UK under their contract

Who is an entitled worker?

Any employees who fit the following criteria:

• Aged between 16 and 74

• Earns less than £5,824 a year

• Works in or normally works in the UK under their contract

What do you need to offer?

You have a responsibility to offer each of your workers the option to join a pension. Here is what you need to do for each type of worker before your staging date:

Eligible jobholders

You must enrol all eligible jobholders into a pension scheme on your staging date.

They can choose to leave the workplace pension during the first 30 days of contributing, this is known as 'opting out'.

You must give all eligible jobholders the relevant information about auto enrolment including:

• How much will be deducted from their earnings

• How much you will contribute

• How much tax relief they will get from the government

• Information on opting out

You will also have to automatically re-enrol eligible jobholders who had previously opted out every three years.

You will make a contribution towards each eligible jobholder's pension.

Non-eligible jobholders

You do not need to automatically enrol them onto your workplace pension.

However, you do have to give them information about opting in or contributing to a separate pension scheme before your staging date.

If they decide to pay into the auto enrolment workplace pension, you must contribute towards it in the same way you do for eligible jobholders.

Entitled workers

They have the right to a pension scheme, but this does not need to be the automatic enrolment scheme.

You must give your entitled worker a 'joining notice' which they can complete and return to you should they wish to pay into a separate pension scheme.

You can choose to contribute to this separate pension scheme, but it is not compulsory. If you decide to, make sure you find a pension scheme which accepts contributions from you as well as your worker.

What happens next?

You should work out if your existing pension scheme will cover your employees' needs or if you have to take out a new pension before your staging date.

Here is more information on finding the right pension scheme and how to set it up, or you can use our auto enrolment form to get in touch with an advisor to discuss your options.