Frequently asked questions
What is 'automatic enrolment'?
New pension rules were introduced in 2008 that made it a legal requirement for all UK businesses to provide a workplace pension by 2018. This is known as "automatic-enrolment" as all employees who satisfy a certain criteria will be automatically enrolled into a workplace pension scheme.
And does automatic enrolment apply to me?
If you employ one person or more who meets the age and minimum earning requirements, then you’ll need to provide a workplace pension scheme.
A workplace pension needs to be provided for all employees who are aged 22 or over and earn a minimum of £10,000 per annum (this is the minimum qualifying earnings for 2016/2017).
When will automatic enrolment start to affect me?
You’ll need a suitable workplace pension in place by your ’staging date’. This is the date your automatic enrolment obligations will come into effect for you. To find out when your staging date is, you can use The Pension Regulator’s staging date checker.
If you don’t have a workplace pension in place before your staging date, you can be fined by The Pension Regulator. We still accept companies who have missed their staging date and by setting up a pension scheme quickly, you can prevent your fines from escalating.
I’m a small business. How will Aviva help me with auto-enrolment?
We describe ourselves as small business specialists. This is because we believe that the level of support we can offer and the benefits of our workplace pension scheme make our proposition a great deal for a small business. Benefits to small businesses include:
- Flexible pricing
- A+ rated financial strength and 5 Star Defaqto rated pension
- UK based helpdesks and live chat
- Online training and support materials
- Employee discounts and benefits
Should I speak to a business adviser before setting up my scheme?
If you feel you need additional support or advice to help you set up your workplace pension scheme, it may be worth speaking to a financial adviser. If you have any queries, we’ll always be happy to help, but it’s worth remembering that whilst we can offer information, we can’t offer advice. For this, you’ll need to speak to an independent adviser.
How much will I need to contribute to my employees’ workplace pension plans?
The amount you’ll need to contribute to your employees’ workplace pension plans will vary depending on the type of pay used to calculate pension contributions. You can find out more information on the ’Understanding pensions contributions’ page.
What is the contribution phasing timeline?
Minimum pension contributions will gradually increase between now and April 2019 and may be subject to further changes in the future. This is known as ’phasing’. Find out more about phasing.
Can contribution levels vary between employees?
Yes - under auto-enrolment legislation, you can make contributions at different rates for different groups of staff members. Auto-enrolment legislation doesn’t replace any other employment legislation, so you need to make sure that you comply with all your duties when you make this decision.
Can I make single contributions to a pension?
Yes. You will still need to ensure that you are making the monthly minimum pension contributions. But you can also make additional one-off contributions. For instance, after an employee has been awarded a bonus payment, as part of your contractual agreement you may need to make an additional pension contribution. Employees can make single contributions to their workplace pension too.
When will I need to make contributions?
You need to work out contributions each time you pay your staff. Some providers, such as Aviva, can only accept contributions monthly even if you pay your staff more frequently.
What is salary sacrifice?
Salary sacrifice is an agreement between an employer and an employee. It refers to sacrificing an agreed percentage of a salary in return for a benefit - in this case, pension contributions.
How does salary sacrifice work?
Salary sacrifice is taken from an employee’s gross earnings. This can be a more tax efficient way to save as it effectively reduces take home pay, which in turn can reduce tax and National Insurance contributions. You can find more information on salary sacrifice here.
Does my existing pension scheme meet the requirements for AE?
For a pension scheme to meet the requirements set out for auto-enrolment, it must meet the following criteria:
- It must have a default investment option – this means that all employees will have their pension contributions automatically invested without actively having to choose between pension funds unless they would like to choose where their pension is invested.
- Contribution levels will need to meet the minimum levels for auto-enrolment.
- All employees who meet the minimum requirements must be auto-enrolled into the scheme.
The Aviva workplace pension
How long do I have to accept my workplace pension quote?
Once you’ve had a quote from us, it’s valid for 90 days. When you get a quote online, we’ll send you a copy by email. You can use this email to retrieve your quote and complete your application later.
Once I accept your quote, how long will it take to get my scheme up and running?
In most cases, your scheme will be up and running within 14 days of completing your application if you get a quote and apply online. If you’ve past your staging date, it’s particularly important to set up your scheme as quickly as possible to avoid larger fines.
Is the Aviva workplace pension suitable for partnerships and sole traders?
Yes. You only need to employ one person to be offered terms for our workplace pension scheme.
Can my employees opt out of the pension scheme? What if they don’t want to join in the first place?
You must auto-enrol all your employees who qualify, i.e. all those you assess as eligible jobholders. If they do not want to stay in the scheme, they can then opt out.
How does opting-out work?
Employees have a window of one month to opt out. If you set up an Aviva workplace pension, this starts from the date on which we send your employee the details of their pension. We run opt-outs on your behalf, and accept them online or over the phone. Once we have accepted an opt-out request, contributions are refunded and the employee is treated as if they had never joined the scheme. This will work differently with other providers/pension schemes.
How much will my employer pension charge be for an Aviva workplace pension?
We charge a monthly fee for running your scheme and providing support, tools and services. Typically, the charge for this is between £30 and £50 per month. You can find out more about the charges for a workplace pension scheme on the ’what are the costs’ page.
How does the AMC (annual management charge) work?
The AMC is a charge capped at 0.75% per year (this can be higher if an employee chooses investment funds outside of the default investment solution, but we will clearly state where higher charges are applicable) that is taken directly from the employee’s pension fund.
What do I get for my employer pension charge?
For an overview of what you will receive for your employer pension charge, please take a look at the ’what do you get’ page.
Is your workplace pension scheme compatible with my payroll software?
Our workplace pension scheme is compatible with all types of payroll software. Find out more about payroll
What communications will I need to send out to my workforce and when?
In order for your workplace pension scheme to be compliant, you will need to send out regulatory communications. If you use our auto-enrolment software, AME Lite, it will automatically work out who you need to send what communications to, and generate them if you ask it to.
What is postponement?
Postponement refers to choosing to postpone auto enrolling your staff in a workplace pension scheme for up to three months if you have a valid business reason to do so. You can find out more information about postponement here.
Do I need to tell Aviva if I am using postponement?
No, you will not need to inform us of this. But you will need to write to the affected employee(s) six weeks from when the postponement period starts to let them know.
I’ve missed my staging date. Can I still set up a workplace pension scheme with Aviva?
Yes. You can find out more about what you’ll need to do and how we can help here.
If I’m a late stager, do I have to pay backdated contributions?
Yes, you will need to pay backdated contributions from the date that you should have staged. In some instances, you may not be able to deduct the backdated employee contributions from your workforce and may need to pay them yourself. It’s worth setting up a pension scheme as soon as possible if you’re past your staging date to prevent mounting costs.
Can I still use AME Lite if I’m a late stager?
No, AME Lite isn’t suitable for late stagers. It works out the timings of all your duties from your staging date. It cannot be adjusted to take account of late staging, so it would not be able to tell you the real timing of your future duties.
Can my employees transfer their existing pension into an Aviva workplace pension scheme?
Yes. Depending on the type of scheme they’re transferring their pension plan from, this may affect the benefits they receive at retirement. We recommend they speak to a financial adviser first.
My employees may want to move the contributions made to their pension pot into another pension scheme? Are they able to do this?
An employee would be able to transfer part of their pension pot into another pension scheme whilst they are receiving employer pension contributions. However, if an employee transfers out the whole value of their pension, this ends their active membership of the scheme. They would need to speak to you about pension contributions going forwards. If they satisfy the automatic enrolment criteria, they will be automatically re-enrolled into the scheme at your next re-enrolment date, though this can create a gap in contributions of up to four years.
Can my employees transfer out of the Aviva workplace pension scheme?
Yes, they can transfer their workplace pension plan to another pension provider without receiving any penalty charges. However, if the value of investments has dropped whilst your employees have been in the scheme, the transfer value of their pension funds may be less than has been put in.