The content on this page is based on the law as it stands today. However, the Government has announced a review of how best to support the implementation of automatic enrolment into workplace pensions and therefore the content is subject to change. The review is expected to conclude by 30 September. Further detail can be found on the DWP website.
Worker
- an employee; or
- a person who has contracted to provide services to you personally.
Jobholder
A worker in Great Britain:
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who works, or ordinarily works in Great Britain;
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who is aged at least 16 and under 75; and
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to whom qualifying earnings are payable.
Eligible jobholder
A jobholder who:
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is aged at least 22 but has not yet reached state pension age; and
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earns more than £5,035 a year (in 2006-2007 terms; this will be reviewed yearly); and
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an employer must automatically enrol into a qualifying scheme from 2012.
Qualifying earnings
A band of gross annual earnings on which contributions are calculated. This is currently above £5,035 up to and including £33,540.
An employer using a defined contribution (DC) scheme must make contributions of at least 3% of an eligible jobholder’s qualifying earnings, up to a cap of £33,540. Any amount the jobholder earns above or below this band does not need to be considered when working out how much the employer’s contributions should be.
Automatic enrolment
When an employer automatically places eligible jobholders into a qualifying pension scheme. An individual who is automatically enrolled is free to opt out and can stop saving at any time, but needs to take action to do so.
Qualifying scheme
A pension scheme that meet certain minimum standards set by legislation. There are different standards depending on the type of scheme. The employer will choose the scheme for automatic enrolment.
Learn more about qualifying schemes.
Staging
The staggered introduction for the changes to take effect, from October 2012 to 2016 starting with the largest employers. New PAYE schemes will come in last.
Staging date
The first date from which an employer must automatically enrol all their eligible jobholders into a qualifying scheme.
Phasing
For DC schemes, the gradual phasing-in of contribution levels until they reach the minimum level required by law.
Registration
A duty on employers to tell the regulator information about the pension scheme they are using and how many people they have enrolled into it.