Between October 2012 and February 2018 employers will need to start automatically enrolling all of their 'eligible jobholders' in a pension scheme which meets minimum requirements. Employers will need to assess their workforce to determine who is an eligible jobholder. They must put processes in place to ensure workers are enrolled once they become eligible, and that those who have opted out are re-enrolled every three years.
Existing scheme members
When the auto-enrolment requirements first apply, an employer has two months to give certain information to workers who are already members of a pension scheme which meets the minimum requirements. The information required includes contact details for the scheme and also confirmation that it complies with the minimum requirements.
Workers who need to be auto-enrolled
For workers who need to be auto-enrolled, the employer must provide information within one month of the date of auto-enrolment. The information required is lengthy and includes basic information about the scheme - such as details of the contributions payable - and where the worker can get more information on pension saving. Employers must also tell staff they have the right to opt out of the scheme and to opt back in again at a later date.
If the employer has decided to auto-enrol its workers into a contract-based scheme, such as a group personal pension plan, workers must be given information about the terms and conditions of the scheme. This is similar to the 'key features information' which the pension provider is required to provide, and it may be easier for the provider to issue this to workers. However, the employer remains responsible for ensuring the one-month deadline is met.
Non-eligible workers
Workers under 22 or over state pension age who pay tax, and those earning between £5,772 and the income tax threshold, do not qualify for auto-enrolment. However, they must be told that they can join a qualifying pension scheme if they choose to do so within one month. Again basic information about the scheme must be provided, together with details of the contributions and how to join.
Employers must tell any other workers that they have the right to join a registered pension scheme and how to do so, together with details about where they can find more information about pension saving. Employers have a month to do this.
Written requirements
Information must be provided to workers in writing. Use of email is fine but just a notice on the employer's website or intranet site, or a hard copy notice displayed in the workplace, would not be sufficient. The employer may instruct a third party to provide the information to workers. However, it is still the employer's responsibility to check that the information provided is correct and that any deadlines are met.
Planning
Employers should start planning their communication exercise well before the auto-enrolment requirements first apply so that they meet the deadlines. Information can be prepared in advance but it cannot be finalised if details are missing.
Employer responsibilities
The employer is responsible for making sure that workers who need to be auto-enrolled join a qualifying scheme. It needs to tell the trustees or the pension provider about new joiners and must provide basic information about them such as names, addresses and dates of birth. It will also need to provide details about pay and contributions. It must provide this information within one month. More information may be required at a later date depending on the scheme rules.
The employer must confirm to the Pensions Regulator that it has complied with its auto-enrolment obligations.