What you need to know about Auto-Enrolment: A quick summary

If you are worried that your staging date is getting closer and you have not read about automatic enrolment and what effect it will have on you as an employer, this short summary will help you put your mind at ease.

All employers have to enrol all employees into a workplace pension scheme and by October 2018 all employers will be required to offer workplace pension to eligible workers. So how do The Pension Regulator classify all the workers? (earning levels quoted are as at August 2016)

Eligible jobholders

  • aged at least 22 but under State Pension age
  • working, or ordinarily work, in the UK
  • earning more than £10,000.

Eligible jobholders are eligible for automatic enrolment into a scheme that meets certain legal standards if they’re not already members of a qualifying scheme.

Non-eligible jobholders

  • aged at least 16 but under 75
  • working, or ordinarily work, in the UK
  • earning more than £5,824, but not more than £10,000.


  • aged at least 16 but under 22, or at least State Pension age and under 75
  • working, or ordinarily work, in the UK
  • earning more than £10,000.

Non-eligible jobholders aren’t eligible for auto enrolment but can choose to opt in to a pension scheme that meets certain legal standards, if they’re not already a member of a qualifying scheme. If they opt in they are eligible for employer contributions.

Entitled jobholders

  • aged at least 16 but under 75
  • working, or ordinarily work, in the UK
  • earning £5,824 or less.

Entitled jobholders can ask to become a member of a workplace pension scheme. This is only if they’re not already members of a workplace pension scheme. There is no duty for you to make employer contributions.

If you have no eligible jobholders you are not required to set up a pension scheme. However if an employee decides to opt into or join a pension scheme the employer must then set one up.

Staging Date

Your staging date will be issued to you by The Pension Regulator via a letter. This date is when you must begin automatic enrolment process and offer a workplace pensions scheme if you have the above jobholders. You can find your staging date by entering your employer PAYE number on The Pension Regulator website: http://tpr.gov.uk/ .


An employer may postpone enrolling employees for a maximum of three months. This can be done for individual employees or for all employees. There are many reasons why an employer may use postponement, for example to:

  • avoid enrolling employees who may have a temporary rise in earning
  • allow for workers with short term contracts
  • align automatic enrolment with other business processes


Communication is a must when it comes to auto enrolment and can be the most time consuming part of the process. You will have to write to each employee individually depending on which category they fall into. Eligible, non-eligible and entitled jobholders all have different rights and so each must receive a different letter outlining their entitlement. There are also time limits in place to ensure that employees have enough time to gather information on auto-enrolment so that they can make an informed decision.

Opting Out & Opting In

Once an employee is enrolled they have 30 days opt out period in which they may choose to opt out and get a full refund of all deductions made. If employee wishes to leave the scheme after the opt-out period has expired, they can do so by stopping their membership with the scheme – scheme rules will apply. It is illegal for an employer to encourage or influence employees in any way so that they opt out of the workplace pension scheme.
If non-eligible jobholder chooses to opt into your auto enrolment scheme, they can do so in writing. Although they are not required to be automatically enrolled, they are still entitled to both employer and employee pensions contributions. Entitled jobholders may wish to also join the scheme and pay employee contributions, however it is not a legal requirement for you to contribute too.


You will be required to fill out Declaration of Compliance within 5 months of the stating date. This allows The Pension Regulator to monitor employers and to ensure that they are complying with their duties. You will receive a penalty for non-compliance.

Deductions & Contributions

You, as an employer, will have the responsibility to make deductions from employees pay and also pay employer contributions. The contribution rates are agreed when setting up your pension scheme, which must be at or above the minimum amount set by law. Here is the table of current minimum contribution levels:

Period Employer minimum contribution Employee minimum contribution Total minimum contribution
Before April 2018 1% 1% 2%
6 April 2018 to 5 April 2019 2% 3% 5%
6 April onwards 3% 5% 8%

Ongoing Responsibilities

You will have ongoing responsibilities as an employer to manage opt in and out requests, monitor new and existing employees in order to check for any change to their worker category, keeping records up to date, re-assessing employees every three years, and submitting a contribution file to the pension provider after each period.

Keeping Records

You must keep all workplace pension related documents and records for at least 6 years.


You are required to enrol eligible jobholders who have opted out every three years. You will also be required to complete a re-declaration of compliance every three years. If an employee opted out three years ago and is still an eligible jobholder, you must re-enrol him/her into the workplace pension.

This is just a quick summary of what is involved in managing auto-enrolment and you can find detailed guides on The Pensions Regulator website: http://www.thepensionsregulator.gov.uk/.

At Cloudit Bookkeeping, we manage auto enrolment process for our payroll clients and if you have any questions or concerns we are here to help. Email us at hello@clouditbookkeeping.co.uk or call 01206 700252.