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Your duties
Understanding your new workplace pension scheme duties
Depending on the size of your organisation, your new workplace pension scheme duties could start as early as 2012.
The new duties mean you may need to enrol some or all of your workers into a pension scheme that meets certain legal standards, known as a qualifying scheme.
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Under expected legislation, you will need to:
- automatically enrol and pay minimum contributions for any workers aged at least 22 but under 65 or State Pension age, depending on when they were born, who earn more than £7,475* in a year
- enrol and pay minimum contributions for any workers at least 16 but under 75 who earn more than £5,035† in a year and who ask to be enrolled
You also need to enrol any workers aged at least 16 but under 75 who earn less than £5,035 who ask you to enrol them. However, you don’t need to pay contributions for them.
Find out more about Enrolling workers
If you choose a defined contribution scheme such as NEST as your qualifying scheme, the minimum contributions you pay are based on a band of earnings known as qualifying earnings.
Qualifying earnings are those between £5,035 and £33,540‡ in November 2008 terms.
The amount you need to contribute will start at a minimum of 1 per cent of qualifying earnings and will rise to a minimum of 3 per cent by 2018.§
Learn more about Contribution rates
All employers will need to comply, but the new duties will be introduced over six years** beginning in 2012.
Large employers, based on the size of their largest PAYE group, will need to comply first, with medium and smaller employers being affected later.
For more on pensions reforms visit The Department for Work and Pensions (DWP)
Find out how pension reform is being enforced at The Pensions Regulator (TPR)
Footnote
* Currently in January 2011 terms. This figure is contained in the Pensions Bill 2011 and could change before the Bill receives Royal Assent and becomes law, or the provisions in the Bill come into effect. The figure will be reviewed every year by the Secretary of State.
† In November 2008 terms. This figure was set out in the Pensions Act 2008 and will be reviewed annually by the Secretary of State.
‡ These figures were set out in the Pensions Act 2008 and must be reviewed annually by the Secretary of State.
§ The Government proposed this new date on 25 January 2012. The detail of these changes will be consulted on in due course.
** The Government proposed this time on 25 January 2012. The detail of these changes will be consulted on in due course.