Automatic Enrolment

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Automatic Enrolment

Introduced under The Pensions Act 2008, and phased in gradually since 2012, every employer who employs at least one person is now obliged to perform certain tasks in respect of their employees and their pension obligations.

Qualifying staff – those who earn more than £10,000 and are aged between 22 and State Pension Age (SPA) – must be automatically enrolled into a suitable pension scheme offered by the employer. The employer must assess eligibility under the rules, and even those staff that do not fit the above criteria are likely to have rights to join the scheme.

These obligations are the employer’s legal responsibility and are overseen by The Pensions Regulator (link to the TPR’s website https://www.thepensionsregulator.gov.uk/ ) who can apply fines for those who do not comply.

Automatic Enrolment is now fully implemented since 2018, meaning that all employers will be subject to these rules, and all staff will have been assessed, and automatically enrolled if eligible.

The choice of schemes available is entirely at the discretion of the employer provided it is a “Qualifying Scheme”, and the spectrum is wide and varied. Employers who have historically selected default-type schemes have come to realise the importance of choosing the right scheme, and are seeking to revisit their original choice.  

Staff are increasingly looking to employers for guidance on their pension, and yet the employer is neither qualified to do this nor has the time to do this.

Accordingly many employers are seeking professional advice on this topic, for the following reasons:

  • to ensure that they – the employer – are compliant with their scheme, assessments and other legal obligations
  • to ensure that they – the employer – are getting good value from the exercise
  • to ensure that the employees are in the most appropriate or beneficial scheme/type, as measured by:-
    • charges/value to the employee/s
    • application of tax relief
    • investment options
  • to provide staff with general or specific advice on their employer’s pension or pensions more widely in general, allowing the employer to get on with running the company and not risking ending up providing advice. 

At Peter Stewart Associates we work with many employers, and their staff, to help them achieve good outcomes from all aspects. We can provide a point of contact in respect of pensions by telephone, and can perform annual reviews with some or all staff as required to engage them with their pension arrangements and ensure that their questions are answered.