Auto Enrolment Jargon Busting

FAQs - Auto Enrolment Jargon Busting

If eligible employees aren’t already in a Qualifying Workplace Pension Scheme (QWPS), employers must automatically include them in one. The auto enrolment joining approach involves assessing the eligibility of the workforce each pay reference period and then joining eligible employees to the QWPS.

If employers aren’t sure that the amount of contributions paid meet the default standard, they may want to certify that their scheme qualifies as a QWPS based on an alternative standard. The department of Work and Pensions has produced detailed guidance on this, including a template certificate.
If eligible employees aren’t already in a QWPS, employers must automatically include them in one. The contract of employment approach involves joining employees to the pension scheme as part of their contact of employment. Because all new employees are joined this way, this significantly reduces the need to assess eligibility
Under auto enrolment rules, employees don’t have to make an active investment decision. So every QWPS that accepts new members needs to offer a suitable option that employees’ contributions can automatically be invested into.
The deferral date is the date when employers must assess the employee(s) that a waiting period has been applied to, and automatically join them if they’re eligible.

A worker who:

Is aged between 22 and state pension age.

Has qualifying earnings above the earnings trigger for automatic enrolment.

A worker who:

Is aged between 16 and 74

Does not have qualifying earnings.

These employees are entitled to join a pension scheme, but employer payments are optional.

Lifestyle profiles are designed for people investing for retirement; as they get closer to retirement the investment aims of the profile of the profile move away from growth and towards preparing their pension pot for retirement. The funds used depend on the profile.

A worker who:

Is aged between 16 and 74

Has earnings above or below the ‘earnings trigger’ for automatic enrolment.

These employees aren’t eligible for auto enrolment, however they can choose to join a QWPS and receive employer payments

Employees have one month from the date they join the scheme to decide if they want to opt out of it. This is known as the opt out period. As part of the new duties, employers have a responsibility to deal with any employee requests to opt out of the scheme.

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