An employer is defined as anyone who has a contract with a “worker”. The employer will have certain duties and safeguards they must adhere to in relation to enrolling that worker into a pension scheme.
As a minimum, an employer with 1 or more worker(s) will need to register with The Pensions Regulator. It is essential that employers understand the different categories of workers and the duties they will have in respect of each category – “eligible jobholders”, “non-eligible jobholders” and “entitled workers”.
ELIGIBLE JOB HOLDERS:
They are called this because they are ‘eligible’ for automatic enrolment’. These are workers who:
- are aged at least 22 and under state pension age
- are working, or ordinarily working, in the UK
- have qualifying earnings payable by the employer (in the relevant pay reference period) that are above the earnings trigger for automatic enrolment (currently £8,105).
NON-ELIGIBLE JOB HOLDERS:
They are called this because they are not eligible for automatic enrolment but can choose to opt in to a pension scheme and benefit from an employer contribution. These include workers who are either:
- aged at least 16 and under 75.
- working or ordinarily working in the UK.
- have qualifying earnings payable by the employer (in the relevant pay reference period) that are above the lower earnings level for qualifying earnings (currently £5,564) but below the earnings trigger for automatic enrolment (currently £8,105).
or,
- aged at least 16 and under 22 or between state pension age and under 75.
- working or ordinarily working in the UK.
- have qualifying earnings payable by the employer (in the relevant pay reference period) that are above the earnings trigger for automatic enrolment (currently £8,105).
ENTITLED WORKERS:
They are called this because they are ‘entitled’ to join a pension scheme; the employer does not have to make any contribution. These are workers who:
- are aged at least 16 and under 75
- are working, or ordinarily working, in the UK
- have qualifying earnings payable by the employer (in the relevant pay reference period) that are below the lower earnings level for qualifying earnings currently (£5,564).
The 10 employer duties essentially focus on “eligible jobholders” however there are important issues that relate to all categories. Please click here to view the 10 Key Employer Duties
From Employer Duties and The pension scheme to how it effects employees
