The 7 steps to Auto Enrolment

1. Know your staging dates

The date you need to comply with the new obligations is known as your staging date.

If you don’t already know your staging date you will need your PAYE reference to find out what it is.

Your staging date is set in law as of 1 April 2012 and is the date your automatic enrolment duties come into effect for you.

Find out your staging date here.

Your PAYE reference can be found on either the letters you have received from The Pensions Regulator about Automatic enrolment or on the letter HMRC sent you when you first registered as an employer.

If you don’t pay your staff through a PAYE scheme, your staging date will be 1 April 2017.

You can put off automatically enrolling all or some of your staff by up to three months if you need to. You’ll have to contact The Pensions Regulator to let them know and also inform your staff.

2. Assess your workforce

Employees need to be enrolled in the scheme if they are:

Auto Enrolment Steps

Younger than the normal state pension age and 22 or older

Auto Enrolment Services

Income is more than £10,000 per year

UK Auto Enrolment Services

All employees who are employed in the UK

It’s important to remember that you are responsible for the constant monitoring of your workforce. If any of your employees circumstances change and therefor make them eligible or no longer eligible it is your responsibility to take necessary action.

Eligible employees that must be enrolled but can opt-out if they choose: 

Current opt-out rates are estimated to be 10 - 12%

You will need to provide any employees that request to opt-out with the contact details of the pension provider that you have chosen.

If employees opt out of the scheme within one month of being automatically enrolled, they will be treated as if they had never joined the scheme. Any money that they had paid into the scheme would be refunded in full.

3. Review your pension arrangements

Take a look at your existing pension arrangements to see if they’ll meet the requirements of the new duties or choose a new pension scheme. 

To be a qualifying pension scheme it must provide a minimum rate at which benefits will build up or minimum contributions must be made.

In-order for a scheme to be suitable for automatic enrolment the pension scheme must not:

  • Impose barriers to joining the scheme, such as age limits for members or probationary periods.
  • Require staff to make an active choice to join or ‘opt out’.
  • Require the provision of extra information in order to stay in the scheme

It is your responsibility to arrange for a suitable pension scheme to be in place for your employees if you do not already have one. Ideally you should do this 6 months before your staging date.

4. Communicate with your employees

As part of the auto-enrolment process employers are required to provide information to their employees detailing how they are affected by the changes. This communication must be provided in writing (which can include email) and must be specific to the individual. You must do this within six weeks after your staging date.

It is in your benefit to invest time to get this part right as, in turn, this could minimise their questions to you.

  • You are required by law to let your employees know about their new pension rights.
  • If you are planning on delaying auto enrolment you must communicate this to your staff.

 It is important to prepare communications to give to your employees.

5. Automatically enrol your eligible employees

Now that you have everything in place you can enrol employees. You must then register with the Pensions Regulator to let them know the scheme you have put in place.

This is where we can help you to get everything in order.

6. Register with the pensions regulator 

You will have been informed of a declaration deadline. This is the date that you must have informed The Pensions Regulator of how you have met your legal duties.

You must do this by completing an online form known as your declaration of compliance. Which needs to be done within 5 months after your staging date.

Even if someone else has helped you to become compliant, it is your sole duty as an employer to ensure that your declaration of compliance has been completed.

You will need to maintain specified records about enrolled workers, their status within the scheme, the payment of contributions and the qualifying scheme itself.

7. Contribute to your workers’ pension

After your staging date, you must contribute to your chosen pension scheme on behalf of your employees.

The minimum amount an employer can contribute will be phased from 1% to 3%.

Employer contributions are:

  • 1% of qualifying earnings until September 2017
  • 2% until September 2018
  • 3% from October 2018

Minimum pension contributions

Qualifying employees are entitled to a minimum contribution into their retirement pot from their employers.

Minimum contributions are based on what’s known as ‘qualifying earnings’.

Qualifying earnings are a section of a worker's pay. For the 2016/17 tax year this is everything over £5,824 and up to £43,000.

How minimum contributions are worked out

The minimum contribution is made up of money from a worker’s pay, money from their employer and tax relief from the government.

Auto enrolment chart

If you have workers who are employed through an agency or on irregular contracts, it’s essential that you understand how Automatic Enrolment applies to them. If you fail to enrol staff who are eligible, you can face penalties.


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‘The 7 Steps to Auto Enrolment’

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