An Explanation of the Automatic Enrolment Process

When it’s happening
The main employer duties are being introduced in stages from October 2012. Employers need to identify their staging date to determine when the duties first apply. This also sets the date for automatic re-enrolment.

The effect on pension schemes
Most employers will have to set up and contribute to a pension scheme suitable for automatic enrolment. Automatic enrolment schemes must meet three sets of criteria.

The effect on the workforce
Employers must assess their workforce to determine which types of worker they employ. Workers can be categorised as eligible jobholders, non-eligible jobholders or entitled workers.

Employer duties
Employers will have different duties depending on the types of worker they employ. They’ll need to automatically enrol some workers into an automatic enrolment scheme and arrange membership of a pension scheme for others. They’re also responsible for the ongoing maintenance of the scheme and have an obligation to keep certain records.

The Pensions Regulator (TPR)
The new employer duties are not optional. TPR will ensure that employers comply with their new duties. Although their approach will be to educate and encourage compliance, employers will face substantial fines or even imprisonment if they don’t comply.