What is Automatic Enrolment?

The law on workplace pensions has changed and every employer with at least one member of staff is required to comply by enrolling those who are eligible into a workplace pension scheme and contributing towards it.

It is called automatic enrolment because it is automatic for your staff – they don’t have to do anything to be enrolled into your pension scheme, but it is not automatic for you the employer.

As an employer, you need to take steps to make sure your eligible staff are enrolled into a pension scheme. Even if you already pay contributions into a pension scheme for your staff, you still need to check if it is suitable for automatic enrolment.

Your company’s Automatic Enrolment duties begin on your Staging Date, so the first thing is to find out what that date is.

Set up a pension scheme or make sure your current scheme meets the new rules

  • Enrol your staff into the pension scheme.
  • Contributions to the scheme come from three places.
    • Employee contributions made as deductions from their pay
    • Employer contributions – a direct cost to the employer and foe many an additional cost
    • The government will contribute via tax relief

And you will need to make sure you contribute the right amounts on the right date to the pension scheme and that the right employees are enrolled in the scheme – every month.

All of this will take time and money. Ideally, you should allow up to 12 months to prepare. Automatic enrolment is your legal duty and if you don’t act you could be fined.