WHAT DO YOU HAVE TO DO?
WHEN DO YOU HAVE TO DO IT BY?
WHO DOES IT AFFECT?
HOW MUCH DO YOU HAVE TO CONTRIBUTE?
WHY CHOOSE FSB WORKPLACE PENSIONS?
WHERE DO YOU GET STARTED?

You will only have automatic enrolment duties if you employ anyone classed as a ‘worker’, this is any individual who:

  • Works under a contract of employment (an employee).
  • Has a contract to perform work or services personally and is not undertaking the work as part of their own business.

 

Categories of Workers

If you have ‘workers’ then you will need to find out what type of worker that you have. They will fall into one of 3 categories dependant on their age and earnings as illustrated in the table below:

categories_of_work_new2

*2017/18 tax year figures

**SPA – State Pension Age

Your requirements for each category are:

  • An Eligible Jobholder must be auto-enrolled at the staging date into the qualifying workplace pension scheme by the employer and the employer MUST contribute. The employee can ‘opt out’ but the employer CANNOT opt out for them.
  • A Non-eligible Jobholder must be offered access to the pension scheme. If the employee wants to join the scheme then the employer must let them, and the employer MUST contribute.
  • An Entitled Worker must be offered access to an Employer pension scheme. If the employee wants to join (opt in) then the employer must let them but the employer does NOT have to contribute.

 

Opting Out

Employees can only ‘opt-out’ once they have been auto enrolled. The employer CANNOT opt them out but must provide the employee with the information they need to opt out.

The right to opt-out of pension scheme membership is a useful and in some cases, essential option. However, it’s only available during a very specific and short time frame for employers.

Opting out under the automatic legislation only applies to jobholders; both eligible, who have been automatically enrolled, and non-eligible who have opted in and become active members of a pension scheme.

Employers have no right to opt-out of their duties and employees are not able to opt-out of the automatic enrolment process entirely.

Exemptions from worker status

An individual working under a contract for services with the employer (i.e. as a self-employed contractor) is not normally a worker. In addition, there are a few exemptions where one or more individuals are employed, but they are not classified as workers. Employer duties do not apply to these people.

Examples could include; non-executive directors, company secretaries, board members of statutory bodies or trustees. It is very important to consider the specific circumstances of the individual.

Click here for more information from The Pensions Regulator – Exemptions can be found on pages 10-12, paragraph 28