Auto enrolment: key topics
What do you need to know? Running a pension scheme can seem complicated. Below, we take you through the key things you’ll need to understand to keep your scheme running smoothly.
Top five questions our customers ask
How does salary sacrifice work?
Salary sacrifice is where an employee agrees to give up part of their salary or bonus in exchange for a benefit paid by their employer; in this case, the benefit would be a pension contribution. After sacrificing the agreed amount, you would then make a payment of the equivalent amount into their pension pot.
As a result, they receive a reduced salary, meaning the National Insurance payments that you and your employee pay will be lower.
If I use salary sacrifice, how will it affect the contributions I pay to Aviva?
If you use salary sacrifice, when you make payment contributions on behalf of your employees', you will need to send this as an employer pension contribution.
What is the Employer Pension Charge for?
We charge an on-going fee each month to run your workplace pension scheme. In return for this fee, we provide a software and support package that’ll help you with the administration involved in running your workplace pension.
The fee will begin from the start date of your scheme and is exempt from VAT.
This fee does not cover your pension contributions. Your pension contributions will need to be paid to us each month using MyAvivaBusiness.
My employee has said they don’t want to join, do I have to automatically enrol them?
Yes, all eligible employees must be auto enrolled into a pension scheme before they can opt out. Your employee will need to contact Aviva once they’ve received their membership pack to tell us they wish to opt out. If a pension contribution has already been received before the employee opts out, we will refund the contribution back to you.
What if someone earns enough to trigger enrolment one month but not the next?
Staff who earn £833 a month (or £192 a week) during a pay period and are aged 22 to state pension age are classed as eligible jobholders. You must automatically enrol them into your pension scheme and make contributions for them (unless you’re using postponement).
Once a member of staff has been auto-enrolled into the pension scheme, if their earnings drop beneath the minimum eligibility criteria in subsequent months, they will still remain a scheme member. If they want to leave the pension scheme, they will need to opt out.
Working with payroll and other software
The type of payroll software you're using will affect what, if any, tasks you'll need to complete for your pension scheme each time you run your payroll.