Workplace pension reform (Automatic enrolment)

Background to workplace pension reform

People have healthier lives and living longer. A Houses of Parliament briefing suggested that by 2031, in the UK nearly a quarter of the population will be aged 65 or over. The Pensions Regulator (TPR The Pensions Regulator, the body that oversees pensions, including automatic enrolment.) said there is currently over 7 million people not saving enough for their retirement.

Arranged by their employer, a Workplace pension is a way for workers to save for retirement. This pension is paid in addition to the State Pension.

Workplace Pension Reform covers changes to pension law affecting all employers with at least one worker in the UK. The Government intends these changes to help address the issues that prevent people from saving into a pension.

Workplace pension reform is usually shortened to WPR and automatic enrolment as AE.

You have to comply with workplace pension reform. You have legal duties under automatic enrolment,

What is automatic enrolment?

A common belief is automatic enrolment (AE) is workplace pension reform (WPR), but this is not the case. Automatic enrolment is one of the most significant employer duties introduced as part of workplace pension reform. The Pensions Regulator says these duties include enrolling workers, who are eligible, into a workplace pension scheme and contributing to it on their behalf.

Most people use automatic enrolment as a catch all term covering both AE and WPR.

Automatic Enrolment means your workers don’t need to do anything to be enrolled into your pension scheme, as an employer you have steps to complete such as:

  • Making sure your eligible workers are enrolled into a pension scheme.

  • If you have an existing pension scheme, speak to your pension provider to ensure it can be classed as a qualifying scheme and is suitable for Automatic Enrolment.

It is a legal requirement for employers to automatically enrol workers into a workplace pension scheme, and contribute to it on their behalf, if they meet the following criteria:

  • Worker is not already a member of a qualifying scheme.

  • Worker is aged between 22 and state pension age.

  • Worker earns over £10,000 in the tax year.

  • Worker ordinarily works in the UK.

Other workers aged between 16 and 74 can also request to join a pension scheme.

  • The Pensions Regulator External website