Workplace Pension Rules for Employers: What You Need to Know

Other names for workplace pensions are ‘occupational pensions’ or simply ‘company pensions’.

Which employers need to provide a workplace pension?

All employers must provide a workplace pension scheme - this is called autoenrollment. Even if your business doesn’t have to enrol employees by law, a pension scheme still needs to be provided and you can’t refuse anyone that wants to join your pension scheme. However, you don’t need to make contributions for any employee who earns less than £520 a month. If any members of staff opt-out of your scheme within the first month, the money paid into the scheme must also be refunded to them.

Which employees can benefit?

If your employees are at least 22 years old and earn more than £10,000 a year, they meet autoenrollment pension requirements and must be placed into a pension scheme. Information must be provided to your employees about their rights whilst in your company’s scheme. This includes the date they have been added, the type of pension and who is providing it, how much they will contribute and instructions for leaving the scheme if they wish.

Staff who are under 22 but older than 16 who are earning more than £10,000 can choose to join your workplace pension and make their own contributions. 

You do not need to enrol any staff that have already given notice that they are leaving, staff who have already taken a pension for their current role or have arranged to get a one-off payment sum - known as a ‘winding up lump sum’ - when they leave your employment. You must make sure that workplace pension rules for employers are being followed.

How to set up a workplace pension

When it comes to setting up a workplace pension, there are quite a few options available. Two of the major pension providers are NEST and SmartPension. NEST is a government-run pension scheme provider that specialises in autoenrollment for employees. The system itself is free for employers to use and has been built in line with practice guidelines from the Department for Work and Pensions and The Pensions Regulator. You can use NEST as your sole scheme or alongside other schemes you have set up.

SmartPension provides similar services to NEST but prides itself on payroll efficiency. The platform works on a ‘one click’ system with most payroll providers and takes the pressure off running pension admin every month. They give access to a digital retirement dashboard, making it easy for employers and employees alike to manage their payments leading up to retirement. They also offer a smart rewards scheme that gives your employees access to over 1200 rewards and discounts across major retailers in the UK.

Both services offer online setup with support but it is important to ensure that you get all your data correct from the outset. Make sure that you have all your business information to hand when you create your accounts. Don’t be afraid to look around and see what works for your size of business.

Pensions can be complex and it’s vital to get them set up correctly so why not get in touch with David Masih, our client relationship partner. David can explain how we can help you to understand the workplace pension rules for employers so that you can support your staff. Call 03330 067 123 for a no-obligation chat today or email info@onthegoaccountants.co.uk.