Auto enrolment

News: August 2012

Auto enrolment

From October 2012 the Government are introducing new legislation to get more people saving for their future. This will mean that employers will have to automatically enrol certain employees into a pension scheme and make contributions on their behalf.

Automatic enrolment and the employer duties will be a big challenge for employers and they’re likely to look to you for help. We can help you prepare for your new duties.

When it’s happening

The main employer duties are being introduced in stages from October 2012. Employers need to identify their staging date to determine when the duties first apply. This also sets the date for automatic re-enrolment.

The effect on pension schemes

Most employers will have to set up and contribute to a pension scheme suitable for automatic enrolment. Automatic enrolment schemes must meet three sets of criteria.

The effect on the workforce

Employers must assess their workforce to determine which type of worker they employ. Workers can be categorised as eligible jobholders, non-eligible jobholders or entitled workers.

Employer duties

Employers will have different duties depending on the types of worker they employ. They’ll need to automatically enrol some workers into an automatic enrolment scheme and arrange membership of a pension scheme for others.

Keeping records

Employers will be responsible for the ongoing maintenance of the scheme and have an obligation to keep certain records. This includes information about their workers and the pension scheme which must be provided to TPR when requested.

The Pensions Regulator (TPR)

The new employer duties are not optional. TPR will ensure employers comply with the new duties. Although their approach will be to educate and encourage compliance, employers will face substantial fines or even imprisonment if they don’t comply.