Pensions and Auto-Enrolment (Workplace Pensions)

Every employer with at least one member of staff now has a responsibility for putting those who meet certain criteria into a workplace pension scheme and of contributing towards it. This includes those who employ Personal Assistants (PAs).

This process is called automatic enrolment. This is because it is automatic for staff – they do not have to do anything to be enrolled into the pension scheme. They can choose to opt-out. However, it is not automatic for a PA Employer and there are several things that the employer has to do.

A PA employer will need to tell their PA about auto-enrolment, check whether they’re eligible and if they are, set up a pension, enrol them and make the correct contributions. The PA employer will also need to complete an online form to declare their compliance with the rules.

What criteria must a PA meet to be auto-enrolled?

The rules say that a PA Employer must automatically enrol all staff who, on your duties start date are:

aged 22 to state pension age, and
are working in the UK – under a contract of employment and
have ‘qualifying earnings’ (QE) of over £10,000 a year (the limit will be frozen at £10,000 for the foreseeable future).

Are all employers affected by auto-enrolment?

Auto-enrolment affects all employers with staff in the UK. There are no exceptions. This may be daunting but the Pensions Regulator (which is in charge of auto-enrolment) has lots of help available for PA employers to guide and support them through the process.

When someone first becomes a PA Employer, it is important that they confirm with The Pensions Regulator who they should contact at the earliest available opportunity. The PA Employer should also advise them that they are PA employer so that they can deal with them in the most appropriate way.

What does a PA Employer do first?

On the first day a person starts working for the PA Employer (known as their duties start date), the PA Employer should formally assess them to see if they meet the criteria to be put into a pension scheme.

Can a PA Employer postpone auto-enrolment?

It is possible for an employer to legitimately postpone assessing an employee for auto-enrolment purposes for up to three months. If the PA Employer wishes to postpone their staff, they must write to their PAs individually (within six weeks) to explain this.

How much will a PA Employer have to contribute?

There is a minimum total amount that has to be contributed by the PA Employer, the PA and the government in the form of tax relief.

For auto enrolment if a worker is automatically enrolled Employer contributions must be at least 3% of qualifying earnings (QE).

Employer plus employee contributions with tax relief must total at least 8% of qualifying earnings (QE).

The minimum contribution applies to anything a PA earns over £6,240 up to a limit of £50,270. This slice of the PA’s earnings is known as “qualifying earnings” (QE).