Pensions — auto-enrolment

The entitlement to an occupational pension depends on the terms and conditions of the employment contract. However, there have also been significant recent changes in pensions law, through the gradual phasing in of pensions auto-enrolment. A new duty on all employers to auto-enrol eligible job-holders who are not already participating in a workplace pension into a qualifying scheme such as the National Employment Savings Trust (NEST), is being implemented in stages. Trade unions were instrumental in bringing about auto-enrolment, which represents a radical and progressive step forward in UK pensions provision.

The new law requires every employer to automatically enrol workers into a workplace pension scheme if they:

• are aged between 22 and state pension age;

• earn at least £10,000 a year;

• work in the UK.

This is called automatic enrolment and it began in October 2012 with workplaces of 120,000 or more. Employers must enrol all eligible workers into workplace pensions between 2012 and 2018 (depending on their “staging date”). Some existing schemes may already meet the minimum qualifying requirements of an auto-enrolment scheme.

Since 1 July 2012, it is against the law for any employer to:

• induce workers to opt out of a qualifying pension scheme;

• ask workers during the recruitment process if they plan to opt out; or

• treat workers detrimentally if they seek to enforce their pension rights.

For more information, see the website of the Pensions Regulator (www.thepensionsregulator.gov.uk).

Important changes have also been made in 2013 in relation to public sector pensions. Information about the New Fair Deal for Pensions can be found in Chapter 12.