When assessing your employees for the purposes of automatic enrolment, there are three different kinds of staff criteria.
- Eligible job-holders. These are people who meet the criteria mentioned earlier and who must be auto enrolled either by your staging date or within a month of becoming eligible.
- Non-eligible job-holders. These are people who do not meet the requirements for auto enrolment either because of their age or because of their earnings (although they must ordinarily work in the UK). They may still ask to be enrolled into a workplace pension scheme and this has to be accommodated. As an employer, you are obligated to pay contributions on behalf of these staff.
- Entitled workers are UK based workers aged between 16 and 74, who earn less than the lower earnings level for qualifying earnings. These workers may request to join a pension scheme but you’re not required to pay contributions. You do however have to ensure that they join a scheme which is registered for the purposes of tax relief and that their contribution is deducted from their pay and made to the relevant scheme on their behalf.
Staff will need to be assessed even if there is a qualifying pension scheme already in place. There are two main reasons for this. Firstly, you’re required to submit a report to the Pensions Regulator within five months of your staging date. This report will confirm that you are in compliance with the legal requirements and will provide additional information about your workers. Secondly, you will need to comply with the communications requirements and to inform staff how auto enrolment will affect them (even if the overall effect is nil).
As previously mentioned, in addition to the initial assessment, employers will also need to make sure that there is a system in place to keep track of when non-eligible employees become eligible employees. All employees must be enrolled within a month of becoming eligible.