Employer Pension Duties

Auto Enrolment Employer Duties

Automatically enrol all eligible employees into a Qualifying Workplace Pension Scheme (QWPS) within 1 month* of becoming eligible and pay contributions for every employee who does not opt out.

*review recommends 3 months

Eligible Employees

Age 22 or over
Under state pension age
Earn more than £7,475
All must be enrolled unless already in qualifying workplace pension scheme
Can opt out only once they have been enrolled – must keep records and re-enrol every 3 years
Non eligible employees must be given option to join

Staging Dates

From October 2012 to 2016, dependent on size of company or if less than 50 employees based on PAYE reference

Contribution dates, levels and split

Date	Total Minimum Contribution - %	Minimum Employer Contribution - %	Minimum difference made up by employee % gross
Oct 2012 - Sept 2016	2	1	1
Oct 2016 - Sept 2017	5	2	3
Oct 2017 onwards	8	3	5

Qualifying Earnings

Contributions based on a percentage of qualifying earnings, as above, between £5035 and £33540.
Qualifying earnings include basic pay, bonuses, overtime, commissions and certain statutory benefits.

Certifying QWPS Status

Various options:

8% of qualifying earnings, minimum 3% employer
9% of employer defined with minimum 4% employer
If employer defined makes up 85% of pensionable pay then 8% with 3% employer
If 100% of pay is pensionable then 7% with 3% employer

NEST

For employers who do not have and do not set up own scheme, they will have to use NEST
Restrictions apply: ban on transfers in and out, upper contribution limit, limited retirement options, limited investment options
Cost 1.8% contribution charge plus 0.3% charge on funds invested

Auto Enrolment record keeping requirements

In addition there must be suitable record keeping behind the main scheme. This must record the following:

1) Age and date on which eligibility is attained

2) Details of auto enrolment date

3) Details of opt out date and forward planning the second auto-enrolment date after 3 years

4) Details of contributions deducted from salary and dates paid to pension provider

5) Details of employer contributions paid to pension provider

6) Details of all employees, - all employees must be offered the scheme, even if they don’t fall into the ‘eligibility’ criteria, if they wish to join they must be allowed to do so and the employer must then contribute also on their behalf.

7) Date on which eligibility ceases

For more information contact Sarah Turner 07775 833565 sarah.turner@woldswealth.co.uk