Workplace Pensions for Employers

Workplace pensions are a government initiative introduced to help more people save for their retirement. All employers in the UK will have to automatically enrol their eligible jobholders into a qualifying pension scheme.

Each employer will have a different staging date (between October 2012-18) depending on the number of people on the company’s PAYE.  Each employer must have a qualifying pension scheme in place by their staging date, and automatically enrol their eligible employees into the scheme. There is no requirement for a worker to contribute unless the employer is not paying the overall minimum required.

Workplace Pensions - when do they start?

As an employer, your staging date will depend on the number of people in your largest PAYE scheme, as of 1 April 2012, with the biggest employers setting up their schemes first, and rolling out through to the smallest businesses by 2018.  Find out your staging date.
You can choose to bring your staging date forward.  If you wish to do so you will need to inform The Pensions Regulator.

Preparing for Auto Enrolment

When preparing for your staging date, you will need to assess your workforce and identify which eligible workers will need to be automatically enrolled into a workplace pension scheme.  Eligible workers automatically enrolled into a pension scheme will meet the following criteria:  

  • be 22 years old or over, but under the state pension age
  • not already in be a qualifying pension scheme
  • earn more than £10,000 a year (2014-15 tax year figures)
  • ordinarily work in the UK

Arranging a Workplace Pension Scheme

If you already offer a pension scheme, it must meet the minimum requirements of a qualifying scheme. If it does not meet the criteria set out by auto enrolment regulation then you will need to change certain aspects of your scheme so that it does comply or put an auto-enrolment scheme into place.

If you do not already have a scheme in place, there are five different types of schemes available for you to set up:

  • Defined contribution (DC) schemes
  • Contract based DC schemes
  • Defined benefit (DB) schemes
  • Stakeholder pensions
  • Hybrid schemes

You may find it useful to speak to a financial adviser, who can recommend the most appropriate type of auto enrolment scheme for your business.  Find a financial adviser in your local area