Q: When is this happening?
A: The DWP began staging the new employer duties over a 5 year
period, starting in October 2012. Employers will be allocated a
'staging date', based on the number of employees in their
largest PAYE scheme as at April 2012.
Large employers with 250 plus employees were the first to stage,
medium sized firms next and smaller firms and new employers
last. The Pensions Regulator inform employers of their staging
date 12 months in advance and send a reminder 3 months before.
Employers can check their staging date on
Q: Are there any individuals who are exempt from the employer
Yes, there are two types of exclusions:
i) People who are treated as workers but are not covered by
the employer duties:-
- those who do not ordinarily work in the UK
- those under 16
- those aged 75 and over
Ii) People who are not treated as workers so the employer
duties don't apply to them:
- the self employed
- members of the armed forces, and
- directors of companies, unless they have a contract of
employment to work for that company and there is anyone else
employed by the company under a contract of employment
I already have a pension scheme in place, do the employer duties
still apply to me?
Yes, even if you have an existing pension scheme that is better
than the minimum standard, you will still have employer duties
to perform - for example, telling existing members how automatic
enrolment will affect them and automatically enrolling new
Does automatic enrolment only apply to unpensioned employees and
No, all workers are affected
Who is treated as the employer for agency staff?
The contract of employment will determine the employer. If there
is no contract in place, it is whoever is responsible for paying
the worker, or whoever actually pays the worker.
What happens if someone works for more than one employer?
Each employer will be required to fulfil their employer duties
separately ignoring any other employment or earnings that the
How do the employer duties apply to hourly paid/ zero hour
contract / temporary/ seasonal/ agency workers on short term
contracts who are re-employed?
The employer duties apply to these workers each time work is
undertaken, for example, if you employ a worker for 3 months,
then employ them again 6 months later, the employer duties will
begin on both occasions.
What are employers not allowed to do?
- Employers cannot offer advice to employees about joining
- They cannot be seen to influence an employee not to join
- They must not encourage employees to opt-out
- They cannot be the source of the opt-out form (this must
be provided by the Pension Provider)
- In particular, the employer must not use financial
incentives or disincentives to persuade employees to join or
not join the scheme
Do I have to base contributions on 'qualifying earnings'?
As an alternative to using the qualifying earnings definition,
employers may choose to certify that their scheme meets the
minimum requirements. Minimum contributions will be based on the
employer's definition of 'pensionable salary'. Pensionable
salary must be at least basic contractual salary and need not
include variable salary such as bonuses, overtime or commission.
Contributions must be based on the first pound of pensionable
salary. Employers may certify in advance that their scheme will
meet the quality requirements as follows:-
- Minimum contribution of 9% of pensionable pay, with at
least 4% paid by the employer, OR
- If at least 85% of total pay across all scheme members is
pensionable, a minimum contribution of 8% of pensionable pay
with at least 3% paid by the employer, OR
- If all pay is pensionable, a minimum contribution of 7% of
pensionable pay, with at least 3% paid by the employer
Is it possible for an employer to pay more and the employee to
Yes, as long as the total contribution is at least the minimum.
What is NEST?
NEST is short for National Employment Savings Trust, a new
government backed pension scheme that employers can use for
(1) The stated figures relate to the 2014/2015 tax year and will
be subject to review each year