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Workplace Pension Solutions

Before you can auto enrol staff you must carry out a staff audit to check for eligibility criteria?

This can be seen by the table which shows Age & Earnings Eligibility Criteria.

The eligibility is determined by Age & Earnings:

  • Earnings must include any bonuses or commissions which may vary
  • Anyone you employ earning £486 monthly or less – Has a right to join the pension scheme.
  • Anyone you employ earning £486 to £833 monthly – Has a right to opt in
  • Anyone earning over £833 has a right to opt in if aged 16-21
  • If aged 22 to State Pension Age – Must be automatically enrolled
  • If aged the State Pension Age to 74 – Has a right to opt in

This eligibility is simplified but is in essence what you must work to when assessing your workforce eligibility as to who you must auto enrol and who you can offer the scheme to.

This process must also be carried out every month or payroll cycle to maintain the correct membership and deal with ‘opt out’ requests, opt in, joiners, leavers, and changes in salary, age of staff to ensure everyone that is eligible or entitled is fully made aware and communicated with by letter or preferably email and auto enrolled as is their entitlement.

How Much Contributions

Initially contributions will be very low to lessen the impact upon salaries but these will gradually increase once employees fully understand the benefits of having a workplace pension and why it’s a positive savings culture and not a burden.

Starting at only 1% jointly from the Employee and Employer this will rise from 1st of October 2017 to 30th September 2018 to 2% from the Employer and 3% from the Employee and increasing from 1st of October 2018 to 3% from the Employer and 5% from the Employee.

Naturally the more that is contributed the faster the greater the pension pot for the employee will grow. These are the minimum contributions your employees can elect to increase their personal contribution levels so not all staff have to stay at these low rates and some may have much higher and your payroll will be responsible for handling the individual’s right to vary their contributions.

Minimum contributions to pensions by date

Date Employers Employees Total Minimum
Before 31/03/18
1% 1% 2%
01/04/18 to 31/03/19 2% 3% 3%
01/04/19 Onwards 3% 5% 8%

These are legal minimum contributions by date and reviewable.

Age & Earnings Eligibility Criteria

22 to SPA*
SPA to 74
and below
Has a right to join a pension scheme
£486 up to £833
Has a right to opt in
a right to opt in
Must Be Enrolled

*State Pension Age

It’s against the law to offer inducements to anyone to ‘opt out’ punishable with heavy fines and at worse a two year term of imprisonment.

If your confused and seek help simply call 0203 004 0601 now or contact us and we will call you back to answer your questions for free.

One less headache to worry about with Active Enrolment the helping hand to guide you through the auto enrolment path to compliance.
Speak to a Pension Specialist today on 0203 004 0601.

Helping you understand about Auto Enrolment for your businessand setting up a Workplace Pension