The law on workplace pensions and employers' obligations has changed. There are some things employers must do, a few they can choose to do - and several they cannot!
EMPLOYER OBLIGATIONS: This page lists the legal responsibilities and obligations of your employer when providing you with a workplace pension.
It started in October 2012. Law changes mean employers can and cannot do certain things with workplace pensions.
The new pension regulations will continue over the next few years. The biggest change is for all employers 'having to offer a workplace pension scheme' by law.
Everyone who qualifies must get enrolled into a workplace scheme. Then, the government, you, and your employer all pay money into the pot.
The new employer obligations for occupational pensions apply to all employers - big and small. In fact, some of the UK's biggest employers are already enrolling their workforce into their particular pension scheme.
Note: The 'Pensions Regulator' have an online staging date calculator. It allows you to check whether the new workplace pension law applies to you and when you will get enrolled. The calculator is a useful tool when planning for retirement because it works for employees as well as employers.
All employers must use 'automatic enrolment' to enrol all their workers who qualify. So, your employer must enrol you into a pension scheme and make contributions to your pension if:
By law, your employer is not required to enrol you if you do not meet the qualification criteria. Even so, you can still choose to join their occupational pension scheme if you would like to. Thus, your employer cannot refuse your application to join in the scheme.
Note: There is one important point to make about their contributions. Employers do not need to contribute to the pension pot if you earn these amounts (or less):
Once you get enrolled into your employer's company pension scheme, they must then:
By law, when it comes to workplace pensions your employer cannot:
Note: Contact 'The Pensions Regulator' if you have concerns about the way your employer is dealing with automatic enrolment or workplace pension management.
Workplace pensions employers' responsibilities in automatic enrolment means writing to staff members. Your employer must write a letter that informs you:
Employers can delay the date of enrollment. As a rule, the longest they can delay enrolling you into a workplace pension scheme is three (3) months.
In some cases, they may be able to delay the date even longer. It might happen if they chose a 'defined benefit' scheme or a 'hybrid' pension scheme. A hybrid pension scheme is a mixture of defined benefit and defined contribution.
Even so, your employer must inform you in writing about the delay and allow you to join in the meantime if you want to.
In you both agree, you and your employer can choose to use 'salary sacrifice' (also known as a 'SMART' scheme).
Salary sacrifice means you give up part of your salary. Your employer would pay it straight into your pension fund. Often, it means you and your employer pay less tax and National Insurance.
Do Employers Have to Contribute to Pensions in the United Kingdom?