Auto enrolment in eight simple steps

Auto enrolment in eight simple steps

Auto enrolment can seem complicated – especially if you’re new to the world of workplace pensions. But it doesn’t need to be a challenge. We’ve created this simple eight-step guide to help you navigate auto enrolment, explaining what you need to do and when, from setting up the scheme to your staging date and beyond.

Step one: Get ready

When? As soon as possible

If you’re a new company and you've not already reached your staging date, the first thing you need to do is work out when your workplace pension scheme needs to start.

  • If you pay PAYE income for the first time before 30 September 2017, your staging date will be 1 February 2018
  • If you pay PAYE income for the first time on or after 1 October 2017, your auto-enrolment duties will start on the same day.

On this date, you’ll need to have a workplace pension scheme in place. You’ll also need to assess your workforce to see who you need to enrol into the scheme.

As part of step one, you’ll also need to confirm an employer contact with The Pensions Regulator. This should be the owner or most senior person in your business, as it’s their responsibility to make sure you comply with auto enrolment.

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Step two: Set up your workplace pension scheme

When? Ideally two months before your staging date or duties start date

As part of preparing for your auto enrolment duties, you’ll need to make some important decisions and apply for your workplace pension scheme. You’ll need to think about:

  1. How much you’ll contribute
  2. Whether your payroll provider will help you with auto enrolment
  3. Who’ll run your scheme day to day

You’ll also need to get a quote and apply for your company pension at this stage.

If you already use payroll software, think about what you want it to do for you. To be compliant with auto enrolment legislation, it needs to be able to assess your workforce, calculate contributions, send communications to your employees and keep records. Having software with the functionality to complete all of these tasks will save you a lot of time in the long run.

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Step three: Assess your workforce

When? On your staging date or your duties start date

The first thing you need to do to meet your auto-enrolment duties is to assess your workforce to find out who’s eligible to be enrolled onto your workplace pension scheme.

  1. Assess your workforce
  2. Using postponement

Assess your workforce

To do this, you’ll need to be certain how much each member of staff earns and how old they are. The table below shows the three different categories your employees might fall into, and what your responsibilities are for each.

Annual salary Age
16 to 21 22 to state pension age State pension age to 74
Below £5,876 Entitled worker
Must be enrolled if they ask. You’re not obliged to contribute to their pension pot, but you can if you would like to.
Over £5,876 but no more than £10,000 Non-eligible jobholder
Must be enrolled if they ask, and you must contribute to their pension pot.
£10,000 and over Non-eligible jobholder Eligible jobholder
Must be auto-enrolled, and you must contribute to their pension pot.
Non-eligible jobholder

Using postponement

You can put off assessing some or all of your workforce for a period of up to three months. This is known as postponement.

Your staging date or duties start date doesn’t change if you use postponement; it simply means that you’re choosing a slightly later date to assess their age and earnings. You might choose to use postponement if:

  • You have staff on temporary contracts
  • You have staff whose earnings fluctuate
  • You require new starters to pass a probationary period – this must be no longer than three months
  • You’d like to avoid having to calculate and pay pension contributions for part of a pay period

If you opt to use postponement, you’ll need to let your staff know and tell them how it will affect them.

Find out if using postponement is the right option for you

Remember: If you employ short-term, zero-hour or other staff who aren’t on regular hours or incomes, you’ll still have to assess them each time you pay them.

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Step four: Enrol staff onto your scheme

When? On your staging date or duties start date(or up to three months later if using postponement)

Once you know which auto enrolment defintion each member of your workforce falls into, it’s time to enrol all eligible employees into your pension scheme.

  1. What to do
  2. Making contributions

What to do

Any employees that you assessed as being eligible jobholders will need to be auto-enrolled into your workplace pension – and with Aviva, this step is easy. All you need to do is upload a file using our online scheme management system, and that’s all there is to it. We’ll then enrol those employees into your pension scheme and send you a welcome pack.

Not sure how to do it? We’ll provide full support to show you how to do this after you’ve applied to set up your scheme.

Employees assessed as non-eligible jobholders or entitled workers don’t have to be auto-enrolled, but they can ask to join your scheme. You’ll need to write to them to explain this within six weeks of your staging date (more on this in step five).

Making contributions

Every time you pay your staff, you’ll need to make contributions into the scheme for any eligible and non-eligible jobholders who are members of it. In most cases, your employees themselves will also have to contribute. You’ll also need to make sure that any contributions you've agreed to make for entitled workers or any other employees covered by contractual joining are paid.

You’ll need to work out how much both you and your employees need to contribute, then send this information to us using our online scheme management system. Again, we’ll provide full support and training to show you how to do this. If you use payroll software, it might calculate the correct contribution amounts for you.

Find out how much you’ll have to contribute

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Step five: Write to your staff

When? Within six weeks after your staging date or duties start date

Once you’ve assessed your staff, you’re required by law to write to them each individually to explain how auto enrolment applies to them and provide details of your chosen workplace pension scheme.

You can do this by letter or email. If you use our workplace pension, you need to have done this before you send us your joiner information. This is important because it affects the date on which the opt-out window starts.

Your payroll provider might offer software that can produce this communication for you.

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Step six: Declare your compliance

When? Within five months after your staging date or duties start date

Five months after your staging date or the day your duties start is when you must make sure you have completed a declaration of compliance form on The Pensions Regulator’s website. This tells the regulator how you’ve met your legal duties.

If you don’t complete the declaration on time or the information you submit is incorrect, you could be fined.

The Pensions Regulator’s website includes a declaration checklist showing all the information you’ll need to have and where you can find it.

Find out more about declaring your compliance

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Step seven: Perform your regular duties

When? Every time you pay your staff

Once your AE duties have started, they don’t stop. In fact, you’ll need to go through steps three to six for as long as you continue to employ people. These steps are:

  1. Assess your staff (every pay period)
  2. Employees who opt out of your scheme
  3. Making pension contributions

Assess your staff (every pay period)

Every time you pay an employee who you haven’t had to auto enrol before (including new staff), you’ll need to assess them – just like you did on your staging date. If any employees are now classed as eligible jobholders, you’ll then need to either auto enrol them into your scheme or use postponement for them.

Employees who opt out of your scheme

If any of your staff who’ve been auto enrolled onto your scheme choose to leave it within one month of being enrolled, this is known as opting out.

Within one month of their request, you’ll need to remove them from your scheme, stop taking contributions from their pay, and arrange a full refund of what they’ve paid to date. If they ask to leave the scheme after this date then any payments already made will remain in the pension plan.

Making pension contributions

Every time you pay your staff, you’ll need to calculate how much to contribute for any eligible and non-eligible workers who are in your scheme.

Learn more about making contributions

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Step eight: Other tasks you’ll need to perform

When? Ongoing

As well as the regular tasks you’ll need to perform, there are a few extra activities you’ll need to keep on top of.

  1. Keep records – ongoing
  2. Re-certify – at least every 18 months
  3. Automatic re-enrolment – every three years

Keep records - ongoing

You’ll need to keep records of how you’ve met your legal duties, including:

  • The names and addresses of those you’ve enrolled onto your pension scheme
  • Records showing when money was paid into your pension scheme
  • Records of any requests to join or leave your pension scheme
  • Your pension scheme reference number

You’re required to record this information by law, and you must keep these records for six years. Requests to leave the pension scheme only need to be kept for four years.

Re-certify – at least every 18 months

If you’re calculating your pension contributions based on something other than qualifying earnings, you’ll need to complete a certificate at least every 18 months. This is to tell The Pensions Regulator that you’re paying at least the minimum contribution levels required by law,

Find out more about pension contributions and qualified earnings

Automatic re-enrolment – every three years

Around each third anniversary of your last staging date or your duties start date, you’ll need to repeat some of the duties you performed on it. This is known as automatic re-enrolment. In essence, it’s when you have to make sure any eligible jobholder who has previously opted out of your scheme is put back onto it.

You’ll have three months either side of the third anniversary of your staging date in which to choose your re-enrolment date, which gives you a six month period within which you can choose your re-enrolment date.

This replaces postponement

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Find out more about auto enrolment

Auto enrolment doesn’t have to be challenging. We’ve got all the information you need to get up and running with your workplace pension scheme.

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