Since being introduced in October 2012, all employers have to offer access to the workplace pension scheme for every eligible employee. An eligible job holder is one aged between 22 and State pension age, who is earning in excess of the earnings trigger, which varies depending on the structure of the pay reference period – for 2016/17 this is:
- £192 if the employees are paid weekly;
- £833 if they are paid monthly;
- £10,000 if they are paid annually.
A key aspect of the Auto Enrolment legislation is that for those employees that are enrolled in a qualifying scheme, you as the employer must contribute an amount into the pension on behalf of the employee, with the employee contributing as well. The amounts that need to be contributed will ultimately depend on how you have set up the scheme in question, whether it is under the 'Qualifying earnings' definition, or one of the three 'Sets' options, but will eventually be either a total of 8% or 9% from April 2019, with at least 3% or 4% being paid by you. The contribution levels are being phased in over the 6 year period which started in October 2012.