In May 2014 The Pensions Regulator released The essential guide to automatic enrolment for employers.
About Auto Enrolment
As people are living longer and likely to enjoy a longer retirement, the UK government introduced Workplace Pension reforms. The recommendations of the Independent Review on Workplace Pension reforms formed part of the Pensions Bill 2011. One of the key changes is Automatic Enrolment.
Automatic Enrolment (AE) is being introduced gradually from 1st October 2012. The staging date for each employer will depend on the number of workers in their PAYE scheme. Larger employers will conduct their AE duties first, with medium and smaller employers to follow.
The Pensions regulator is helping employers prepare for automatic enrolment with a wide range of tools and guidance. Whatever your involvement in AE, here's a reminder of the free facilities they have to offer:
November 2013 Changes to Auto Enrolment
The Department of Work and Pensions announced changes to automatic enrolment legislation, aimed at simplifying the process for employers. The majority of these changes came into force on 1st November 2013, with changes to the joining window and registration deadlines coming into force from 1st April 2014.
The Pensions Regulator have detailed guidance on all aspects of Auto Enrolment.
Helping advisers help employers
Whether you're an employee benefit consultant, independent financial adviser, payroll administrator or accountant, you'll be in a position to provide invaluable help to employers with AE.
The Pensions Regulator has designed a series of tools and resources specifically to help you help your clients.
Automatic Enrolment is the core employer duty of work based pensions reform. It means that employers must automatically place all eligible employees into a pension scheme and advise them that they have done so. For NHS employees, the qualifying scheme is the National Health Service Superannuation Scheme (Scotland) (NHSSS(S)) and for employees in the teaching profession, the qualifying scheme is the Scottish Teachers' Superannuation Scheme (STSS).
All employees who are eligible under scheme regulations should be automatically included in the relevant section of the NHSSS(S), or STSS from
the first day of employment. Employees must be enrolled and then make a decision about whether they wish to opt out.
- Automatically enrol all eligible jobholders into the scheme without the jobholder taking any action.
- Provide new members with information about the scheme they have been enrolled into and about automatic re-enrolment.
- Advise members who do not wish to be in the scheme, to obtain the opt out form from our website.
- Re-enrol jobholders, who have previously opted out on the third anniversary of the employers staging date (jobholders who have opted out within 12 months of the re-enrolment date are exempt until the next automatic re-enrolment date).
- Provide a refund of contributions to jobholder who opt out during the opt out period.
- Provide and contribute to an alternative qualifying pension scheme if the jobholder is not eligible to join the NHSSS(S) or STSS.
- Monitor opt outs and re-enrol jobholders if they become eligible under Auto Enrolment rules.
- Keep accurate records.
- Process opt in requests for eligible jobholders.
There are some occasions where an individual is not eligible to join the NHSSS(S) or STSS, this is because they may have:
- Been an active member for the maximum 45 years.
- Retired early (age 55) with special class status (maximum membership is 40 years at age 55 or 45 years overall) (NHS only).
- Retired from the 1995 section and not eligible to rejoin the scheme (NHS only).
- A full time job with an NHS or STSS employer and a second job with the same or another NHS or STSS employer. This is because they will have reached the full time equivalent pensionable earnings that can be paid into the scheme and cannot be auto enrolled into the NHS or Teachers' scheme for their second job.
Where an employee is not eligible to join the NHSSS(S) or STSS but is eligible to join an alternative qualifying scheme, they must be enrolled in such a scheme. Employers will be able to choose an alternative pension provider of their choice, such as the National Employment Savings Trust (NEST). Full details of NEST can be found on the NEST website.
As the NHS and STSS pension schemes are contracted out of the State Second Pension Scheme, both employees and employers pay a reduced rate of National Insurance contributions. In order to keep HMRC informed of your employees that are contributing and benefitting from this lower rate of National Insurance contribution you will be required to quote the Scheme Contracting-out Number (SCON) and the Employer's Contracting–out Number (ECON) on all future HMRC returns.
Accordingly, the numbers are as follows:
It is important to check our website regularly for up to date information about AE.
More detailed information can be obtained from: