Understanding Workplace Pension - Auto Enrolment

This topic provides an overview of the auto-enrolment of workplace pension.

Auto-enrolment is a semi-compulsory approach to retirement saving introduced by the UK government. Auto-enrolment includes the automatic enrolment of all qualifying employees into a qualifying pension scheme. An employee’s workplace pension is a way of saving for retirement arranged through the employer. Workplace pension is also known as a ‘company pension’, ‘occupational pension’, or ‘works pension’. The employer and employee together need to make a contribution that adds up to 8% value of the employee’s earnings.

The UK government made it compulsory, from October 2012, for all employers with at least one worker in the UK to automatically enroll certain members of their workforce into a pension scheme. The start date, called the staging date, varies according to the number of employees in each Pay As You Earn (PAYE) scheme. The UK government made is mandatory for all employers with 250 or more employees to comply by February 2014.