ABOUT WORKPLACE PENSIONS: Most employees plan for retirement through a work-based pension.

As a rule, your employer will arrange a works pension as a way of saving for life as a senior when you finish working.

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How Occupational Pensions Work

Your employer puts a percentage of your wages into the workplace pension scheme. It is an automatic investment they make for you every payday.

They will usually add extra money into the same occupational pension plan. That means you should also get tax relief from the government in the United Kingdom.

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Rules for Joining a Workplace Pension

All employers must offer a workplace pension scheme by the year 2018. This new process of joining a workplace pension is better known as ‘automatic enrolment’. That is because your employer will enrol you automatically into a company pension scheme.

Following this, you, your employer and the government make workplace pension payments to your fund if all these apply:

• The classification of your employment status is a ‘worker’.
• You are at least 22 and below the State Pension age.
• Your earnings are at least £10,000 per year.
• You usually work in the United Kingdom (ordinarily resident).

Staging dates were set in law from the 1st of April 2012. It is the date when your automatic enrolment duties come into effect. You can find out your staging date for enrollment using ‘The Pensions regulator’.

Note: The calculator works for employees but it is mainly for employers. In some cases your employer can delay the date they enrol you into the scheme.

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When Your Employer Does Not Need to Automatically Enrol You

There are more circumstances when your employer does not have to enrol you automatically. If you fail to meet the previous criteria or if any of these circumstances apply:

• When you already gave notice to your employer that you will leave your job (or they gave you notice).
• You have evidence showing your lifetime allowance protection (HMRC certificate would be an example).
• Your employer already enrolled you in a workplace pension plan.
• You receive a one-off payment from an occupational pension scheme that is now closed (a ‘winding up lump sum’) and you leave and rejoin the same job within one year of receiving the payment.
• You ‘opted out’ of a pension arranged through your employer more than 12 months before your staging date.
• You are from an EU member state and already in a EU cross-border pension scheme.
• You are in a limited liability partnership.
• You have director status in a company without an employment contract and you employ at least one other person.

Note: Your employer cannot make a refusal if you want to join their work-based pension scheme.

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What if You Have Low Income?

Employers do not need to contribute to their employees’ pensions if their workers earn less than:

• £120 per week
• £480 per 4 weeks
• £520 per month

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Stages of Automatic Enrolment

Your employer must inform you in writing when they automatically enrol you into their workplace pension scheme. They letter must inform you:

• The exact date they added you into the occupational pension scheme.
• What type of pension scheme you got enrolled into and who manages it.
• How much your employer contributes and the amount you will have to pay in.
• The procedures for leaving the scheme (if you decide to opt out).
• How the UK tax relief applies to you.

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Delaying the Enrolment Date

In some cases your employer can delay your enrollment date (up to 3 months). They may be able to delay it even longer if either:

• They chose to enrol their employees in a ‘defined benefit’ pension.
• They enrol you in a ‘hybrid’ pension (a combination of different types of pensions) that lets you to take a defined benefit pension.

If your employer delays your enrollment date they must:

• Inform you about the delay in writing.
• Allow you join the scheme in the meantime if you want to.

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What Employers Cannot Do

By law, when it comes to workplace pensions and employer obligations – your employer cannot:

• Force you, or encourage you, to opt out of the company scheme.
• Discriminate against you, or use unfair dismissal, for staying in a workplace pension scheme.
• Make implications that someone would be more likely to get a job by choosing to opt out of the pension scheme.
• Close their workplace pension scheme without ‘automatically enrolling‘ all their staff members into another one.

Note: Contact ‘The Pensions Regulator‘ if you have concerns about the way your employer is dealing with automatic enrolment or workplace pension management.

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