Under the new pension auto-enrolment scheme, all employers will have to automatically enrol eligible jobholders into a qualifying pension scheme. This could, for example, be an existing pension scheme (if it meets, or can be changed to meet, the necessary automatic enrolment criteria), or the new National Employment Savings Trust (NEST).

Workers for whom automatic enrolment will be required are those who are:

  • Aged between 22 years and the State Pension Age (SPA)
  • Earning over the minimum qualifying earnings threshold (£9,440 in 2013-14)
  • Working or ordinarily working in the UK
  • Not already a member of a qualifying pension scheme.

All businesses will need to contribute at least 3% of the qualifying pensionable earnings for eligible jobholders. However, to help employers to adjust, compulsory contributions will be phased in, starting at 1% before eventually rising to 3%.

It is a 6 year process, with different ‘staging dates’ for each employer, depending on the number of employees. You can check your own staging date via the sites below. They also give guidance on setting up the schemes etc.

Whatever your staging date, it is essential for employers to plan for the changes in good time. Consider the following action points:

  • Nominate a point of contact
  • Know your staging date and develop a plan
  • Assess your workforce
  • Review your pension arrangements
  • Communicate the changes to all workers
  • Automatically enrol eligible jobholders into a pension scheme
  • Register with the Pensions Regulator and keep records
  • Contribute to your workers’ pensions

Links: to the government advice site, the pensions regulator site and the HMRC site.