Who Is Eligible For Pension Auto-Enrolment?
UK employees who are eligible for pension auto-enrolment are those who are:
- Earning more than £8,105 a year.
- At least 22-years-old, but below state pension age.
- Not already signed up to a work pension that meets the Government’s requirements.
When Does Pension Auto-Enrolment Start?
The date on which an employer must auto-enrol their staff into a the pension scheme is called the ‘staging date’. This will vary from business to business, depending on the size of its PAYE scheme on 01 April 2012.
Staging dates have been allocated at various points over four years, with the largest companies auto-enrolling employees first. The staging date for smaller companies is likely to be in 2016 and HMRC will be in contact with individual businesses to inform them of their staging dates.
Can Staff Opt Out?
Employees have to be enrolled before they can opt out – and they only have a one-month window to decide. They must make an informed and voluntary decision and then submit an opt-out notice to their employer. If they opt-out they will be automatically re-enrolled every three years and must opt out again if they still do not want to be part of the scheme. This is because the Government wants to ensure that everyone has a pension pot when they retire.
There are a number of benefits of a workplace pension, including the fact that an employer contributes to the employee’s pension pot and that tax relief is available. If an employee leaves their job, their pension moves with them.