Auto-Enrolment
Background
It is now a legal requirement for all UK employers to enrol certain people into a workplace pension scheme – this is known as “auto-enrolment”.
In order to be eligible for auto-enrolment, you must meet all of the following criteria:
– you must earn (or be reasonably expected to earn) over £192 per week / £833 per month
– you must be aged between 22 and State Pension Age
– you must not already be a member of a “qualifying workplace pension scheme” of that employer
As you are working via Trafalgar, you are classed as an employee for payroll purposes. They must therefore enrol you into the pension scheme if you do meet these criteria.
When will you be enrolled?
Your eligibility will be assessed as soon as you start working via Trafalgar.
If you are below State Pension Age, you will be enrolled into the scheme immediately, regardless of the level of your earnings at that time. Trafalgar will write to you to confirm that this has been done.
Provided that you earn at least £120 per week / £520 per month, the minimum contributions will start to be deducted from your earnings straight away. If you earn less than this amount initially, then contribution deductions will start as soon as you cross this earnings threshold.
Please be aware that your 1 month opt-out period (see below) will start on day 1 of employment, as soon as you are enrolled. This may be before you have had any contributions deducted from pay.
What if you don’t meet the enrolment criteria?
If you are not automatically enrolled, you may choose to join the scheme voluntarily – this is known as “opting-in”.
What if you are enrolled, but don’t want to be a member of the scheme?
If you don’t want to take part in the scheme, you can choose to “opt-out”. This can only be done after you have been enrolled – it is not possible to opt-out without first becoming a scheme member.
You cannot opt-out via your employer – it must be done via the pension scheme.
The opt-out process is carried out on the Digi member portal. It is important therefore that you do login to your account when you receive the initial assessment letter from Trafalgar and the subsequent emails from Digital Wealth Systems, inviting you to register for the portal.
You have 1 month from receiving your enrolment letter in which to opt-out. If you do this, any contributions that have been deducted will be refunded to you; and you will be classed as never having been a member of the scheme.
While you are within the 1-month opt-out window, the “My Pension” page of the Digi portal will contain a link that you must follow in order to complete an opt-out declaration. If that link is not visible, it means that you are outside of the opt-out window. In that case, you can choose to suspend any future payments to the scheme, but you will not be able to obtain a refund of contributions.
A pictorial guide to the opt-out process is available here.
What is re-enrolment?
All employers are required by law to re-assess their whole workforce every 3 years.
Anyone who has previously opted-out but still meets the criteria for auto-enrolment, must be re-enrolled at that time. There is an exception to this for people who opted-out within 12 months of the re-assessment date – these people do not need to be re-enrolled.
If you opt-out, you may therefore find that you are re-enrolled into the scheme at some point in the future. If you still don’t want to take part in the scheme, you will then need to opt-out again.
What if you opt-out, but change your mind?
If you have opted-out and then decide that you would like to re-join the scheme, you should first contact Trafalgar to let them know. You will also need to complete a Member Application Form.
Can you use your own pension plan for auto-enrolment?
No, this isn’t possible. Your employer can only auto-enrol you into a “qualifying workplace pension scheme”, that they have registered with The Pensions Regulator.