It’s a great question, but unfortunately there is no simple answer to this.
According to the Pensions Regulator, employees are split into three categories with regards to Auto Enrolment:
• Eligible jobholders
• Non-eligible jobholders
• Entitled workers
All employees will therefore need to be assessed to determine which category they fall into BEFORE the staging date.
Additionally you’ll need to monitor those that are not currently categorised as Eligible Jobholders, to ensure that if their circumstances change (a pay increase or they move into the qualifying age criteria) they are automatically enrolled.
To understand who’s who, let’s first look at employees that automatically qualify for Auto Enrolment and must be placed onto a company scheme.
These are known as “Eligible jobholders” and meet ALL of the following criteria:
• Are not already an active member of a qualifying scheme
• Work or usually work in the UK
• Earn more than £10,000 a year*
• At least 22 years of age but under State Pension age
*The figure of £10,000 applies to the 2014/15 tax year and will be reviewed every year by the government.
Now let’s look at the other two categories.
Non-eligible jobholders are workers in the UK aged between 16 and the State Pension Age and earning upwards of £5,772 but not fitting into the category above.
A non-eligible jobholder is entitled to opt into a Qualifying Workplace Pension Scheme from the staging date and so must be provided with information on how to do this in advance. If they do opt in then employers must pay contributions to this scheme for them at a level set out in the legislation.
Entitled workers are workers in the UK aged between 16 and 74 and who earns less than £5,772 (2014/15 figures annualised).
An entitled worker is entitled to access to a pension scheme and the employer must provide them with information in relation to this in advance of their staging date. The scheme that they are given access to, does not have to be the same scheme that eligible and non-eligible jobholders are given and the employer does not have to pay any contributions to the scheme in relation to them.
Want to learn more? For more information about how Credius can help visit www.credius.com/autoenrolment or contact Credius today at email@example.com or call on 020 7562 5858.
Next time: Opting Out and Inducement