You don’t need to automatically enrol every employee into your workplace pension scheme.
Only eligible employees have to be automatically enrolled.
But as part of the employer’s duties, all staff who aren’t eligible for automatic enrolment (AE) must be written to after their first AE assessment and to tell them about their assessment outcome and their right to opt-in, or join, the workplace pension scheme.
Opting in by a non-eligible job holder
Non-eligible jobholders (anyone earning over £5,824 and up to £10,000) can ask to opt-in to your scheme and if they do, you’ll need to make contributions.
Opting in (joining) by an entitled worker
You don’t need to enrol an entitled worker (earning less than £5,824) but these employees can ask to join the scheme.
You won’t have to make any contributions to the scheme.
How employees opt-in
The process of opting in will vary depending on which pension provider you’re using. The communication you send out to your employees will outline the opt-in process. Sometimes an employee will have to ask the pension provider for a form. But in many cases, a signed letter sent by your employee to you will be enough.
Employees can also request to join via email but this email must include a statement confirming that the employee has personally submitted the notice.
What to do if you receive an opt-in notice
You’ll need to assess the employee again to decide whether they are a non-eligible jobholder or an entitled worker. This assessment should be done on the first day of the next pay reference period after you receive the opt-in notice; this will also become their enrolment or joining date.
If you receive an opt-in notice part-way through the pay reference period you’ll need to assess the worker on the first day of the next pay reference period.
The pay reference period is the frequency with which you pay your employees – weekly, monthly or every four weeks.
a) Non-eligible jobholder
If you’ve assessed an employee as being a non-eligible jobholder then you’ll need to either:
- Enrol the jobholder within six weeks of the enrolment date by following the automatic enrolment process
- If you don’t have a scheme in place you’ll need to set one up within six weeks of the enrolment date and enrol your employee.
b) Entitled worker
You have six weeks from the joining date to set up a scheme but it doesn’t have to be an auto-enrolment qualifying scheme as long as it’s a tax-registered scheme.
You’ll need to keep records relating to the scheme and your employees who are members of this scheme, such as the opt-in notice.
Detailed guidance from TPR: Opting in, joining and contractual enrolment
