We have been bombarded with reminders that the obligation on employers to auto-enrol their workers into pension schemes began this month. All employers with a PAYE scheme size of 120,000 or more must now start the auto-enrolment process. Those with 50,000 or more will start next month. The "staging dates" (calculated by PAYE size as at 1 April this year) continue until 2018, ultimately covering all employers. Mandatory contributions, which will eventually reach 3% for employers, are also being phased in over the same period.
However, employers may recall that, before the introduction of auto-enrolment duties, although there was no requirement to contribute to a pension scheme for employees, an employer with five or more employees was obliged to designate and facilitate access (including deducting employee contributions) to a stakeholder pension scheme, unless the employer offered an occupational pension scheme or group personal pension scheme instead. This statutory duty to designate a stakeholder pension scheme has been repealed with effect from 1 October 2012 for all employers, regardless of size. The upshot is that employers are no longer required to provide access to a pension scheme until they reach their auto-enrolment staging date.
However, employers are still required to include certain basic information about pensions in the written statement of particulars or employment contract: a statement of particulars of any terms relating to workplace pension schemes and a statement on whether the employee's employment is contracted-out of the state second pension.