1. for Employers
1.1. Only larger employers are required to comply with AE
1.1.1. FACT 1
1.1.2. By the end of 2017, all employers of all business sizes are required by law to set up a workplace pensions scheme for their employees and contribute in their pension fund.
1.2. There is plenty of time for AE
1.2.1. FACT 2
1.2.2. According to the Pensions Regulator, it takes 12-18 months for preparation and implementation. If you want to avoid the capacity crunch, start planning ahead by putting your systems in place, collecting and updating your employee data and engaging your workforce.
1.3. My staging date can be postponed
1.3.1. FACT 3
1.3.2. Staging dates can't be postponed but you can delay your first assessment for 3 months. During this postponement period, entitled workers have the right to join in a qualifying pension scheme.
1.4. The AE process is easily managed
1.4.1. FACT 4
1.4.2. Regulatory obligations cannot be easily handled by employers due to risks of facing penalties and continuous legal updates. There is also the administrative burden. Assessing your workforce is a complicated task, time consuming and costly. Over 90% of employers seek advice for choosing a pension provider and 74% of employers seek compliance support. (NEST).
1.5. The Financial Advisor will handle AE process
1.5.1. FACT 5
1.5.2. Even a Financial Advisor will be reluctant to handle administration. Integrating new pensions schemes into your existing payroll, compliance tasks, record-keeping and routine data submissions are some of the responsibilities they avoid getting involved in.
1.6. All employees must be automatically enrolled
1.6.1. FACT 6
1.6.2. It is not mandatory for all working groups. Only eligible workers must be automatically enrolled into a workplace pension scheme.
1.6.2.1. aged between 22 and the State Pension Age
1.6.2.2. earn more than £10,000 a year
1.6.2.3. work in the UK
1.6.3. Non-eligible workers can opt-in by making a request to their employer.
1.7. My current pension scheme is fine
1.7.1. FACT 7
1.7.2. Your existing pension scheme needs to be compatible with auto enrolment requirements. It must be verified as a "qualifying workplace pension scheme" and all employees must be assessed whether or not the criteria is covered.
1.8. Employees will want to opt-out
1.8.1. FACT 8
1.8.2. Opting-out is not advisable, because employers who encourage it will be penalised. However, if they decide to opt-out, they can do so by completing and submitting an "opt-out" notice to their employer within 30 days of initial enrolment.
1.9. Since, all employees are enrolled, I'm done!
1.9.1. FACT 9
1.9.2. Not quite! You will need to register a Declaration of Compliance 5 months after your staging date. Failing to submit the Declaration on time results in a fine.
1.10. Workforce Assessment is one shot!
1.10.1. FACT 10
1.10.2. Not at all! Your employees need to be reassessed every 3 years.
2. for Employees
2.1. You must be enrolled, like all employees
2.1.1. FACT 1
2.1.2. Only if you belong to the working group that meets the AE criteria.
2.2. You will want to opt-out
2.2.1. FACT 2
2.2.2. If you decide to opt-out, you can do so by submitting an "opting-out" notice to your employer within 30 days of initial enrolment. However, you must be aware that all employers face penalties if they encourage the "opt-out option".
2.3. Once enrolled, you can't opt-out
2.3.1. FACT 3
2.3.2. Every eligible worker is entitled to opt-out if they don't wish to contribute to a workplace pension.
2.4. Once opted-out, you can't opt-in
2.4.1. FACT 4
2.4.2. The employer is legally obligated to automatically enrol and reassess staff every 3 years, so you can opt-in again, even if you had opted-out.
2.5. I will be reimbursed if I opt-out
2.5.1. FACT 5
2.5.2. If you opt-out within the first month of joining a pension scheme, you will be reimbursed for any of your contributions made within that period. If opt-outs are after the 1st month, no refunds of your contributions will be offered.
2.6. I have plenty of time to consider retirement options
2.6.1. FACT 6
2.6.2. The earlier you join, the easier it will be. People in the UK aren't saving enough for their retirement. By enrolling into a workplace pension scheme, your employer pays part of the contributions and the process is hassle-free for you.
2.7. Auto Enrolment is unaffordable!
2.7.1. FACT 7
2.7.2. A pension scheme will cost you only 0.8% minimum of your qualifying earnings. Also, with AE, your employer is obliged to make contributions to your pension fund by paying 1% of your qualifying earnings. The government adds a tax relief of 0.2% of your earnings. Meaning, in total 2% contributions to your pensions scheme until September 2017 and thereafter rising. This makes it more affordable for you, since everyone is contributing more to your pension pot.