Important auto-enrolment messages for employers

For new employers and start-up businesses

Taking on your first member of staff? You’ll need to assess them to see if you need to put them into a workplace pension – and make contributions on their behalf. It’s the law.
Every employer has automatic enrolment duties, even if they only have one member of staff. As an employer, you’ll need to put certain staff into a workplace pension, and make regular contributions to the scheme on their behalf. From 6 April 2018, the minimum amounts employers have to pay into their staff’s workplace pensions increased to 2% of qualifying earnings, while staff now contribute 3% – making a combined total minimum contribution of 5%. Make sure you’re paying enough – it’s the law.

The Pensions Regulator has online information and guidance that will help you including a short video, and a useful template letter to help you explain the increases to your staff.

For employers who have already enrolled staff

The minimum amount employers must pay into their staff’s workplace pensions increased from 6 April 2018. Make sure you know what you need to do.
On 6 April 2018, by law, the minimum amount employers have to pay into workplace pensions increased to 2% of qualifying earnings, while staff will now need to contribute 3% – making a combined total minimum contribution of 5%.

Date effective Employer minimum contribution Staff contribution Total minimum contribution
Until 5 April 2018 1% 1% 2%
From 6 April 2018 2% 3% 5%
From 6 April 2019 3% 5% 8%

You should contact your pension provider and payroll team to check arrangements are in place to pay in these new amounts. It’s also recommended that you write to staff to let them know about the increase in contributions – The Pensions Regulator has letter templates available to help you do this.

The earnings thresholds for automatic enrolment increased on 6 April 2018 – make sure you know how these changes will impact the pension contributions you pay on behalf of your staff.
As an employer, your automatic enrolment duties are ongoing. As well as keeping records, managing requests to leave or join your scheme, it’s also important to monitor the ages and earnings of your staff (including new starters) on an ongoing basis to see if you need to put any of them into a pension scheme. While your payroll software is likely to make these age/earnings calculations automatically, it’s important that you know what’s required to ensure you meet your legal duties.

Every year, the Department for Work and Pensions (DWP) review the automatic enrolment earnings thresholds – the thresholds for 2018/19 have changed and the new figures can be found here.