Pension duties – Pento UK

Before you begin

UK Payroll can help fulfill your pension duties by:

Assessing existing and new employees.
Sending employee pension letters for eligible staff with and without a postponement period.
Automatic enrollment, once criteria is met.

UK Payroll can’t complete your Declaration of Compliance or give pension advice.

Note: Pensions are a legal duty. If you don’t comply with your initial, ongoing, and re-enrollment duties, you could be fined.

Pension status assessments

UK Payroll will automatically assess your employees’ pension status to ensure compliance to pension duties. These status assessments will happen during:

The first day of an employee’s employment.
The deferral date, or the last day of the postponement period, if applicable.
Each pay period, if the employee was previously ineligible for a pension scheme.

Note: All employees must have a pension provider set before pension status assessment. To learn more, see Enroll staff into a pension scheme.

Employee pension statuses are listed in the Employees section, which you can access from the left side bar.

Not enrolled: refers to an eligible job holder and requires a pension status to be set.
Not opted-in: refers to a non-eligible job holder and doesn’t require a pension status to be set, unless the employee has asked to opt-in to the pension scheme.
Not joined: refers to an entitled worker and doesn’t require a pension status to be set, unless the worker has asked to join the pension scheme.
No provider set: indicates that the employee hasn’t been assessed yet and requires a provider to be set on their employee profile.
Opted-out: indicates that an employee chose to leave the pension scheme during their opt-out window and is no longer included in the scheme.
Left scheme: indicates that an employee chose to leave the pension scheme after their opt-out window and is no longer included in the scheme.

Automatic enrollment

For an employee to be considered an eligible jobholder and be automatically enrolled into a pension scheme, they must meet the following criteria:

Earn over £833/month
Aged between 22 - and the state pension age.

Non-eligible jobholders who don’t qualify for automatic enrollment are:

Employees aged 16-21 or State Pension Aged - 74, who earn above £10,000/year
Employees aged 16-74 earning above the automatic enrollment lower earnings level but below £10,000/year.
Note: To see the earnings thresholds for this tax year, see The Pensions Regulator’s Earnings thresholds.

If an employee is a non-eligible jobholder, they can still choose to join the pension scheme.

Entitled workers who don’t qualify for automatic enrollment are:

Employees aged 16-74 earning less than the automatic enrollment lower earnings level.

If an employee is an entitled worker, they can still choose to join the pension scheme. However, the employer isn’t required to contribute unless they would like to, or unless the pension scheme rules dictate there must be an employer contribution.

Note: Employees with variable pay, whose earnings are usually below the threshold for auto-enrollment, may become eligible due to a one-off payment. In this case, you can use postponement to delay their assessment until their pay has returned to normal. If you choose to use a postponement, employees still have the right to join the scheme before the end of the postponement period. To learn more, see The Pensions Regulator’s Postponement.

For more information, see The Pensions Regulator’s Work out who you need to put into a pension scheme.

Writing to your staff

Once an employee has been assessed, you must write to them individually to explain how automatic enrollment applies to them. You must write to them within 6 weeks of their first assessment or when they become an eligible jobholder.

UK Payroll provides letters for eligible employees that are automatically enrolled and for eligible employees that are enrolled with a postponement. This is done when an employee is assigned to a pension scheme.

You must write to non-eligible jobholders and entitled workers directly. You can download a list of these employees by downloading a pension report.

From the left side bar, select Employees.
Click Import/Export > Download pension report in the top right corner.

If your pension provider doesn’t do this on your behalf, you can use The Pensions Regulator’s letter templates.

Re-enrollment

Every 3 years, you’ll need to put certain staff back into your pension scheme if they have opted-out, if they meet the criteria for auto-enrollment. The Pensions Regulator will write to you in advance of your re-enrollment date. For more information, see The Pensions Regulator’s Re-enrolment and re-declaration.

You will need to:

Assess opted-out staff and re-enroll them if they meet the auto-enrollment criteria.
Write to your staff to explain how re-enrollment applies to them.
Submit your re-declaration of compliance, whether or not you have staff to re-enroll.

To re-enroll staff, follow the steps in Pension re-enrollment.

Opt-outs

Note: An employee can only opt-out from the pension once they have been enrolled. This means an employee will need to have been enrolled and contributed for at least one pay period before they can opt-out of the scheme.

Once an employee is enrolled into your pension scheme, your pension provider sends them a welcome pack with details on opting-out. If you use an integrated pension provider, UK Payroll will automatically opt them out of the pension scheme once they opt-out directly with the provider.

If you don’t use an integrated pension provider, you need to opt the employee out manually. For more information, see How to opt-out an employee.

Ongoing duties

UK Payroll automatically notifies you of any employees without a pension provider on the Overview page. Similarly, eligible employees wihtout a pension status are listed on the Payroll Summary page.

Furthermore, very time you pay your staff, you must monitor changes in their age and earnings to see if they should be enrolled in your pension scheme. You also need to manage requests to join or leave the scheme. For more information, see The Pensions Regulator’s Guidance for employers.

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