In this article
Under the Pensions Act 2008, Government legislation stipulates that all Employers must enrol staff into a workplace pension scheme and contribute towards it. There are certain duties that must be met in order to remain compliant with The Pensions Regulator, you can check your duties here.
Pento & Pension Duties
Pento will not be able to:
- Complete your (re) Declaration of Compliance
- Give Pension Advice
Pento will provide:
- General Assistance
- Employee letters for eligible staff with and without a postponement period
- Assessment of existing and new employees
- Auto-Enrolment once criteria is met
Types of workers for Automatic Enrolment
There are certain criteria that must be met in order for an employee to be automatically enrolled:
- They earn over £192 per week (or £833.33 per month)
- They are aged 22 or over and
- They are under state pension age
If an employee does not meet the above criteria, they can still choose to opt-in or join the pension scheme, your employer obligations will depend on what type of worker the employee is.
Eligible jobholders are employees that meet the auto-enrolment criteria and must be automatically enrolled into the pension scheme.
Non-eligible jobholders are:
Employees that are 16-21 or State Pension Age-74 earning above £10,000 per annum
Employees that are 16-74 earning above the automatic enrolment lower level of qualifying earnings but below £10,000 per annum
These employees will not automatically be enrolled, however, they have the right to opt-in to the pension scheme where the employer will have to contribute
Please note - The lower earnings level is reviewed each tax year, for further guidance on the Earnings Thresholds, you can visit The Pensions Regulator's website:
Entitled workers are:
Employees aged 16-74 earning less than the automatic enrolment lower level of qualifying earnings
These employees will not automatically be enrolled, however, they have a right to join the pension scheme where the employer will not have to contribute unless they'd like to or the pension scheme rules dictate there must be an employer contribution.
For further guidance on the different types of workers, you can visit The Pensions Regulator's website:
Writing to your staff
Once an employee has been assessed, it is a legal requirement to write to them individually to explain how automatic enrolment applies to them. You must write to them within 6 weeks of their first assessment or the point at which they become an eligible jobholder if this is different to their first assessment date.
At the moment, Pento only provides letters for eligible employees being enrolled, and eligible employees being enrolled with a postponement.
Please note - You must write to non-eligible jobholders and entitled workers directly.
If your pension provider does not do this on your behalf, you can use the letter templates from The Pensions Regulator's website:
Each time you pay your staff you must monitor changes in their age and earnings to see if they need to be put into your scheme.
You will also need to manage requests to join or leave the scheme. If you use one of our integrated Pension Providers, you can find further information on scheme joiners and leavers in our respective help articles:
The People's Pension: Integration
If you do not use an integrated pension provider, please refer to our help article How to enrol staff into a non-integrated/CSV pension scheme for guidance on adding staff to the pension. For guidance on scheme leavers, please refer to the Opt-outs section in this article.
Please 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 has been enrolled into the pension scheme, your pension provider will send them a welcome pack with details on how to opt-out. If you use one of the integrated pension providers, Pento will automatically opt them out of the scheme once they have opted out directly with the provider.
If you do not use an integrated pension provider, you will need to opt the employee out manually from the Pension tab on their employee profile, to do this, please follow the steps below:
- Navigate to Employees from the left sidebar
- Search for the relevant employee
- Select the Pension tab
- Scroll down and select Change pension status
- Once selected, you will see the following modal:
- Select Opt-out
- Enter the relevant details. The opt-out date should be the date the employee opted out directly with the pension provider
- Select Opt-out summary
- Review the summary details and select Opt out if happy
- Once selected, your employee's record will look similar to the below screenshot:
Please note - Pento will not automatically refund contributions once an employee has opted out within the opt-out window, please refer to our help article How to Apply a Pension Refund
Every three years, you’ll need to put certain staff back into your pension scheme if they have left it, and if they meet the criteria to be put into a pension scheme. This is known as re-enrolment. The Pensions Regulator will write to you in advance of your re-enrolment date to explain more.
You will need to:
- Assess staff that previously left the pension scheme and re-enrol them where they meet the criteria
- Write to your staff to explain how re-enrollment applies to them
- Submit your re-declaration of compliance whether you have staff to put back into your pension scheme or not
For further guidance on Re-enrolment, please refer to The Pensions Regulator's website:
Pento and Re-enrolment
At the moment, Pento does not have an automated module for re-enrolment, therefore you will need to manually re-enrol staff into the pension scheme once you have reached your re-enrolment date.
Please note - Pensions are part of your legal duties as an employer, if you do not comply with your initial, ongoing and re-enrolment duties, you could be fined
For further guidance on complying and what happens if you don't, please refer to The Pensions Regulator's website: