What is automatic enrolment?
The law on workplace pensions has changed. Every employer with at least one member of staff now has new duties, including enrolling those who are eligible into a workplace pension scheme and contributing towards it. This is called automatic enrolment.
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. 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.
The following tasks in particular will take you some time:
- setting up a pension scheme
- enrolling your staff into the pension scheme. Contributions to the scheme come from three places. You will make deductions from their pay, you will make employer contributions and the government will contribute via tax relief. You’ll need to make sure you contribute the right amount
Ideally, you should allow up to 12 months to prepare. Remember, automatic enrolment is your legal duty and if you don’t act you could be fined.
Automatic Enrolment Checklist
A checklist of things you need to do as part of your automatic enrolment preparation and duties.