When does work pension auto-enrolment become compulsory?

GenD

My employer (I won't give the company name, but it's one of the 'big 4' supermarkets) has offered a good workplace pension for several years, and I joined it voluntarily when it was first set up. My colleague, who is much younger and hadn't been with the company very long at that time, decided not to join, but says she wasn't given any paperwork giving her the option to opt in or out, it was just briefed out to us that it was set up if we wanted to join.

Last year she decided she ought to be in it, after seeing all the TV ads etc, so she asked one of the managers how to go about joining, and was told 'You don't have to do anything, you'll be enrolled automatically', so she's been waiting for that to happen, which it still hasn't. But we just found out that new employees, who started in December, have all been auto-enrolled, although on asking around it seems that no other long-term employees have been.

I've been reading up on the Gov.UK website about the pension rules, and it says that our firm had to start offering a workplace pension by 2012, which they did, but is there a date by which they have to auto-enrol everyone, or is that up to them?

I've advised her to query it with the HR department first, to see what reason they give for enrolling new starters before existing employees, but any further information would be gratefully received.

Stubod

Each organisation has a different staging date for auto enrollment as it's being "phased in". But most larger organisations should already be past this date. Once the deadline has been reached every employee must be enrolled, (there are some age restrictions that apply if you are older). If the employee does not want to join they have to apply in writing to "opt out", (although not sure why anybody would want to give away "free money"?)...Best to check your companies "go live" date for auto enrollment.

I would assume that if an employee has not been enrolled and the date has passed then they would be entitled to "back date" any pension payable to the star date?

hyubh

GenD wrote: »

Last year she decided she ought to be in it, after seeing all the TV ads etc, so she asked one of the managers how to go about joining, and was told 'You don't have to do anything, you'll be enrolled automatically', so she's been waiting for that to happen

She should contact HR and say she wants to join the pension scheme.

But we just found out that new employees, who started in December, have all been auto-enrolled, although on asking around it seems that no other long-term employees have been.

As a large employer, the supermarket would have had its auto-enrolment 'staging date' a few years ago. I imagine your colleague basically opted out when that happened, so the next time she would be put back in again automatically (with a right to opt out again) is after every third anniversary of the staging date.

I've advised her to query it with the HR department first, to see what reason they give for enrolling new starters before existing employees, but any further information would be gratefully received.

They won't be auto-enrolling new starters before existing employees as such - I'd be 90% confident she opted out when the staging date was met, or at least classed as such.

(That said, another possibility is that she's on diddly hours and a rate of pay somewhat south of George Osborne's, and so doesn't earn enough to be opted in automatically. You haven't suggested that however.)

xylophone

https://www.moneyadviceservice.org.uk/en/articles/automatic-enrolment-into-a-workplace-pension

GenD

Hi all, and thanks for all the replies.

I had already found the 'staging date' for our employer, which was 2012, but everything I read (including that helpful link from the money advice service) isn't clear about whether that's when they had to start auto-enrolling or just offering the pension to all employees, which they did. According to the rules, if they didn't fulfill their obligations then they will have to backdate their contributions, but I wanted to be certain of the facts before telling her to try asking for that!

I don't remember seeing all the TV ads etc about compulsory auto-enrolment until the last 18 months or so, not as far back as 2012. My friend is positive she wasn't given any paperwork that she had to fill in to prevent auto-enrolment, she only remembers being told the pension was there if she wanted to join, and that's what all the others we've asked have said. But as it was nearly 5 years ago, I can't remember what paperwork I got either! If she had actually opted out, would the company have something in writing that she'd filled in?

Also, if their staging date was 2012, and she'd opted out then, she'd have had to be auto-enrolled back in 3 years later according to the rules, and that hasn't happened either.

(By the way, she is well over the minimum wage requirement, and as she's 28 now, even in 2012 she would have been above the required age of 22.)

Should she ask for proof of her opting out , both in 2012 and presumably again in 2015 if that's the rule?

xylophone

Was the company offering a pension scheme before 2012?

Employees were informed that there was a pension scheme but it was their choice whether or not they joined?

Autumn 2012 was the SD for the Big Four

https://www.usdaw.org.uk/CMSPages/GetFile.aspx?guid=4183e931-5ff1-4f45-86cf-a3b246184998

In the past, workers generally had to make
an active decision whether or not to join the
company pension scheme. Under the reforms
workers now have to be entered into a
workplace pension scheme automatically.
This is called auto-enrolment.

Auto-enrolment began in October 2012. It
started with the biggest employers (including
all of the Usdaw ‘Big 4’ – the Co-operative
Group, Morrisons, Sainsbury’s and Tesco)

If you are not already contributing to your
employer’s pension scheme then you will
qualify to be auto-enrolled if all of the below
apply to you:
You are age 22 or older.
You have not yet reached State Pension age.
You earn more than the minimum earnings
threshold (currently £10,000 a year).
You work in the UK.

Opting out

You can opt out of auto-enrolment but you will
have to apply to do so.
Usdaw believes that it is not in the best
interests of workers to opt out. We want to
encourage our members not to opt out – to
stay enrolled – and take full advantage of
employer contributions tow[/U]ards your pension
savings.
If you do opt out then your employer must
auto-enrol you again every three years until
you reach State Pension age.
As larger employers commenced auto enrolment
in 2012, they will now be entering
Stage 2 of auto-enrolment and will need to
re-enrol anyone that opted out three years ago."


Your friend needs to contact HR to find out what has happened.

xylophone

Is your friend a member of USDAW?

neilvw

This is really odd and not the sort of thing you would expect from a large supermarket chain. OP, please update when you find out more!

GenD

Thanks again guys.

We don't have Usdaw, our union is Unite, but my friend is a member, so I'm sure they'll help if she needs it, but I'm a member too and they haven't given us any advice about the pension scheme that I can remember.

It looks to me as if our company hasn't auto-enrolled any existing staff, just asked if they want to join - and a lot of the ones I've spoken to said things like 'I didn't bother with it', or 'I don't understand that stuff'. As far as I understand it, the whole point of the new laws is to enrol everyone and make it more difficult to leave than to stay in, so the ones who don't bother or are scared it will be complicated are the ones who end up IN. Everyone who's not in it has said they weren't given anything saying they'd already been enrolled, or had to put in writing that they wanted to leave, so it looks like the company haven't followed the rules.

I know there was a pension a long time ago, which I didn't join, but I think it was closed before they brought in the new one. I do know that a year or so after the current one started it was converted to a 'smart' one where they take it before tax.

The scheme we have is a very generous one, where we pay 5% of our pay and the company make it up to 13% (including the tax saving), so I'm rather cynically wondering if they regret offering so much and don't actually want too many people joining. I don't know if the new starters are being offered the same terms, but I would assume they have to be in the one scheme rather than different ones.

I'll definitely post with what answer she gets from HR; we work nights so she's planning to phone them this afternoon.

xylophone

I'll definitely post with what answer she gets from HR; we work nights so she's planning to phone them this afternoon.

She might want to put her query in writing?

https://www.jspensions.co.uk/wp-content/uploads/2016/01/Sainsburys-AE-Factsheet-SIPP.pdf

https://cdn.ourtesco.com/2016/01/OurTesco-QA-v3-5_1_15.pdf

https://pensions.coop.co.uk/automatic-enrolment

https://www.mymorrisonsretirementsaver.co.uk/en/what-is-auto-enrolment

xylophone

our union is Unite, but my friend is a member, so I'm sure they'll help if she needs it,

http://www.unitetheunion.org/unite-at-work/pensions/

Members with pension problems in the workplace should raise these in the first instance with their local representatives and/or full time officers, who can, where required, access expert support from Head Office. - See more at: http://www.unitetheunion.org/unite-at-work/pensions/#sthash.ud1Jr0ER.dpuf