Automatic enrolment means all employers have to place workers in a workplace pension if they meet the relevant criteria. But automatic enrolment isn’t a one-off process for new workers, and employers’ duties when it comes to pensions don’t end there. Failure to comply with ongoing pension obligations can lead to employers being fined.

Here’s a reminder of some ongoing obligations for employers when it comes to workplace pensions.

Monitor workers’ ages and earnings

Workers aged between 22 and State Pension age are normally eligible for automatic enrolment if they earn over £10,000 per year (or £192 per week), although there are exceptions to the normal criteria.

Employers therefore need to keep an eye on their workers’ ages, earnings and relevant circumstances, enrolling them in a pension scheme if and when they meet the criteria.

Contribute to the pension scheme

Employers must make payments to the pension scheme at each payroll run of at least the minimum required amounts for both the employer and on behalf of the worker.  

Payroll software should calculate the necessary amounts for you, but the Pensions Regulator clarifies what counts as earnings for these purposes.

Manage scheme joiners and leavers

Eligible workers who are not currently in the pension scheme (for instance because they previously opted out) can request to join the scheme. Employers have to action this type of request within a month.

The eligibility criteria for asking to join a scheme are different to those for automatic enrolment – workers aged between 16 and 74 and earning at least £120 per week have to be admitted to a scheme on request, which obliges the employer to pay into the pension scheme for them.

Workers wishing to leave the pension scheme may be best contacting the pension provider to arrange this, but employers must provide suitable contact details and stop taking pension contributions via payroll.

Requests to leave a scheme made within one month of a worker being automatically enrolled have to be actioned within a month, and all contributions that workers have paid into the scheme must be refunded to them.

Re-enrolment and re-declaration

Eligible workers who aren’t in the workplace pension scheme must be placed back into it at least every three years. Theoretically, this should only consist of workers who previously opted out, and they can choose to opt-out again if they wish. However, regular re-enrolment is a legal obligation on employers. This process should also help tackle any compliance issues where workers were inadvertently not auto-enrolled.

Employers also need to submit declarations of compliance, even if no workers were re-enrolled. The Pensions Regulator website has helpful guidance for employers on re-enrolment and re-declaration. 

Record keeping

Finally, employers have to keep records relating to their pension scheme as evidence that they’ve complied with their obligations. For instance, details of enrolled workers, contributions paid into the scheme and requests to join it must be kept for six years.

The Pensions Regulator can take enforcement action against employers who don’t comply with their workplace pension obligations. In the most serious cases, daily penalties can be issued ranging from £50 to £10,000, depending on the number of workers on the payroll.

 

This article reflects the position at the date of publication (16 January 2024). If you are reading this at a later date you are advised to check that that position has not changed in the time since. 

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