Workplace Pensions

Under the provisions of the Pensions Act 2008, there are now new rules for workplace pensions in the UK. These changes impact on every workplace and are designed to ensure that every worker has the opportunity to become a member of a pension provision and to be given a means to save for their retirement.

From October 2012, the rules on “automatic enrolment” began to be implemented. Under these rules, and based upon the total number of employees within their organisation, employers have begun to enrol their employees into a workplace pension arrangement.

Different employers are required to enrol their employees into a pension scheme by different dates.

If they have not already done so, employers should check their individual enrolment date using the online staging date calculator on The Pensions Regulator website. 

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In the past, employers could choose whether or not they made a contribution to their employee’s pension pot. Under the new rules, The government has set a minimum amount that must be paid into a pension scheme for eligible and non-eligible jobholders. This is 8% of qualifying earnings. However, to help employers deal with the costs incurred by auto enrolment the levels of contributions are being phased in over a number of years. 

Employees previously needed to actively apply to join a pension scheme. Now, the law now states that, once their staging date is reached, every employer must automatically enrol workers into a workplace pension scheme.

Other workers who fall outside of these categories will also be entitled to join the scheme if they express a wish to do so. These new rules complete the transition from the old concept of a pension scheme being available for the few to now becoming an integral part of every employee’s work benefits.   

A number of default schemes such as the National Employment Savings Trust (NEST) have been approved as an option for employers who do not wish to develop a bespoke pension arrangement for their employees.