Auto enrolment: am I legally compliant?

Step one

^{Set up a workplace pension}

You must have a workplace pension scheme in place by your duties start date which meets the auto enrolment criteria. (Your duties start date is the day your first member of staff joined the company – you can't change this date). You must auto-enrol any of your employees you decide are eligible, unless they are already members of a suitable scheme.

Eligible employees are those who are at least 22 years old, but under State Pension age, earn more than £10,000 a year and work in the UK.

If you already have a pension scheme in place, it might be suitable for auto enrolment. Just make sure it meets the following conditions:

• It has a suitable default investment fund that all employees’ pension contributions will be invested in, unless they decide that they want to choose their own investment options
• The pension provider/trustees agree that the existing pension scheme can be used for auto enrolment
• The level of pension contributions that you and your employees contribute to the pension scheme meet the minimum levels for auto enrolment
• All employees who meet the auto enrolment criteria are enrolled onto the pension scheme

Step two

^{Send regulatory communications to your workforce}

There are certain regulatory communications that you need to send to your employees to make sure they know all about auto enrolment. You can send them via letter or email – just make sure that you send it within 6 weeks of your duties start date and include these details:

• When they can join the workplace pension scheme
• The scheme's key features of your chosen workplace pension scheme
• Who will be auto-enrolled, and who can choose to join the pension scheme
• How they can opt out if they choose to leave the pension scheme

The compliance software you use may be able to help you with this.

Step three

^{Declare your compliance}

You’ll need to let The Pensions Regulator know that you have a compliant workplace pension scheme in place. To do this, you'll have to complete a declaration of compliance on The Pensions Regulator site within five months of your duties start date. You or someone acting on your behalf, like a financial adviser, can complete this.

Your auto enrolment duties won't be fulfilled until you've completed a declaration of compliance - The Pensions Regulator could fine you.

Step four

^{Perform your auto enrolment duties}

Once your workplace pension scheme is up and running, you'll have regular auto enrolment duties. To stay compliant, you’ll need to:

• Assess your staff each time they're paid to see if there are other employees who can now be auto enrolled. An employee's earnings may have increased, for instance, or they've had their 22nd birthday since they were last paid meaning they're now eligible to be auto enrolled.
• Add new members to the scheme.
• Deal with employees who want to opt in or out of your scheme, or stop active membership.
• Pay the contributions generated by paying your staff.
• Perform re-enrolment duties once every three years so that eligible jobholders who have left your pension scheme or stopped paying pension contributions can be put back onto the scheme.
• Keep records of what you have done, including all the arrangements you have made and contributions you have paid, for six years. Records of opt-outs must be kept for four years.