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Auto-enrolment: three years and counting

1 February 2016

Large employers were required to begin automatically enrolling workers into qualifying pension schemes from October 2012, and all employers employing more than 50 employees became subject to the new regime by April 2015.  Under the auto-enrolment regime:

  • All employers, regardless of size, are obliged to enrol "jobholders" who earn more than £10,000 and are aged 22 to state pension age, automatically in a pension scheme meeting the "quality requirements", unless the jobholder falls within one of a limited number of exceptions.
  • Employers can use an existing scheme or a new arrangement for auto-enrolment, as long as it meets certain requirements.  These requirements vary depending on the type of pension arrangement.
  • Employers also need to enrol those who do not qualify for auto-enrolment into a pension scheme if they so request.  They need to pay contributions for those earning more than "qualifying earnings".
  • Employers must conduct a re-enrolment exercise every three years.
  • Until 2018, only minimal contributions will be required.
  • From April 2019, employers using a DC scheme for auto-enrolment must ensure that contributions equalling 8% of qualifying earnings are paid into the scheme for each qualifying jobholder (with 3% coming from the employer).  Alternatively, an employer may certify that minimum levels of contributions are being paid.

An eligible jobholder must be auto-enrolled within three months of the date on which he or she first meets the age and income requirements.  Notice requirements apply immediately, however.

To read the full briefing note click here.

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