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What employers must do by law

Your employer must let you know in writing if you’re being enrolled into a workplace pension or not. When you'll be enrolled depends on the size of the organisation you work for. Very large employers are doing it first, in late 2012 and early 2013. Other employers will follow sometime after this, over several years. Your employer will give you the exact date nearer the time

If you’re being automatically enrolled, your employer must let you know in writing:

• the date of your enrolment
• the pension scheme you will be enrolled into
• how much will go into your pension (as a percentage of your salary or as an amount)
• how you can opt out of the pension, if you want to

Your employer must also:

• accept your request to join their workplace pension, if you have previously opted out or stopped paying - your employer must accept your request once in a 12 month period but can choose to accept further requests if they want to
• enrol you back into the pension at regular intervals (usually every three years), if you meet the eligibility criteria and aren’t in a workplace pension
• pay your full contributions on time, to whoever runs your pension scheme

If you’re already in a workplace pension, your employer must confirm in writing that the pension meets the government’s new standards.

If you’re not being enrolled and you’re not already in a workplace pension, your employer must:

• explain in writing that you have a right to join a workplace pension
• explain to you how you can join.

If you ask your employer to join a pension scheme, you may be entitled to your employer’s contribution. Your employer will let you know if this is the case.

• Enrolling into a pension at work

If your employer closes their pension scheme, they must immediately enrol all members into a replacement pension.

If you’re no longer a member of a workplace pension because of a mistake by your employer, they must enrol you back in immediately.

What employers can choose to do

Delay

Employers are allowed to delay the date they enrol you into a pension, by up to three months from the deadline given to them by the government.

If the pension is a defined benefit or hybrid pension scheme, and you have an existing right to join your employer’s pension, your employer can delay enrolling you for several years.

• Types of workplace pension schemes

If your employer does delay, they have to let you know in writing. If you want to join your workplace pension in the meantime, your employer must accept your request.

Salary sacrifice

Employers can use ‘salary sacrifice’. This is an arrangement that must be agreed between you and your employer. You give up part of your pay and your employer pays this amount into your pension pot instead. It is also known as ‘salary exchange’ or ‘SMART scheme’.

What employers can’t do

The new law states certain things employers cannot do. The employer can’t:

• try to encourage or force workers to opt out of their workplace pension
• imply during the recruitment process that a worker can only be employed if they opt out of their workplace pension
• dismiss a worker or treat them unfairly because they stay in their workplace pension
  

If you have any concerns about how your employer is dealing with your automatic enrolment into a workplace pension you should report them to The Pensions Regulator. Even if you're unsure if your concern needs to be reported you should call The Pensions Regulator on 0845 600 7060 or email them at:

wb@tpr.gov.uk

What to do if you don't want to be in your employer's pension

You can opt out. Your employer has to tell you in writing how to do this.

• Opting out of your workplace pension

Minimum amount that has to be paid in to your workplace pension

The amounts paid in by you, your employer and the government (tax relief), are usually calculated as a percentage of your earnings. Your employer will let you know what these are. The government has set minimum amounts for defined contribution pension schemes.

• Types of workplace pension schemes

Minimum that has to be contributed in total

The government has set a minimum percentage that has to be contributed into your workplace pension in total. It is made up of your contribution, your employer’s contribution and the tax relief, added together. The minimum will start at two per cent and increase to eight per cent over the next few years.

Minimum that has to be contributed by your employer

As part of the overall percentage, the government has also set a minimum percentage that has to be contributed by your employer. This will start at one per cent and increase to three per cent over the next few years.

These minimum percentages do not apply to all of your salary. They apply to what you earn over a minimum amount (currently £5,564) up to a maximum limit (currently £42,475). This is sometimes called ‘qualifying earnings’.

So for example, for someone who earns £18,000 a year, the minimum percentages are calculated on the difference between £18,000 and £5,564, which is £12,436.

Contribute more than the minimum

Your employer can choose to pay more into your workplace pension than the minimum required. If so, you can choose to reduce your own contribution. But the overall contribution must still meet at least the minimum level set by the government. You can also choose to increase your contribution.

More useful links

• Saving for retirement

• Acas Opens new window

• Pensions Regulator Opens new window

• Employers - automatic enrolment into workplace pensions on Business Link Opens new window

• What to do if your workplace pension scheme is closed or wound up