As company sizes are reducing, the proportion of employers with an in-house payroll department is on the decline. This has resulted in the number of employers looking for assistance and support from their external payroll provider to dramatically increase. The payroll industry is crucial to the successful implementation of auto enrolment and, in response, SWH has started providing this service.


Pensions Explained

1. Know your staging date:

The time when the new law affects your company is known as the ‘staging date’, which is determined by the size of your largest PAYE scheme (see table 1). You can find out more by visiting -



2. Assess your workforce

Workers who need to be automatically enrolled in a pension scheme are called ‘eligible jobholders’. An eligible jobholder is aged between 22 and state pension age, is an EU worker and earns above £10,000 (this figure is reviewed periodically). Assess who is an eligible jobholder, auto enrol them into a qualifying pension scheme and make contributions on their behalf. Workers who are not eligible jobholders still have the right to opt into a pension scheme or to join one.



3. Review your pension scheme

Do you have an existing pension scheme? If you do you can enrol all eligible jobholders into it – as long as it qualifies as an ‘auto enrolment scheme’. If it doesn’t qualify, you’ll need to choose a different scheme. You can choose from a number of pension providers including the Government’s National Employment Savings Trust (NEST) which must accept you if you apply. Qualifying schemes have a minimum contribution or must provide a minimum rate.



4. Inform your workforce of the changes

You must communicate to your workers, in writing, all the changes that affect them – either through a printed letter or via email. This must be provided in writing and must be personalised. This is the employer’s responsibility.



5. Automatically enrol your eligible jobholders

To make an eligible jobholder a member of an auto enrolment pension scheme, you’ll need to supply certain information about your jobholders to, for example, pension scheme managers at specific times in the process.



6. Register with The Pensions Regulator and maintain records

You must register online with The Pensions Regulator after your staging date to inform them about how you have auto enrolled. On an on-going basis, you must maintain records about workers on the scheme.



7. Make contributions to your workers’ pensions

It is compulsory to contribute to your chosen pension scheme for your workers after your staging date. From 2012 to 2018, the minimum contribution rates that an employer must pay will be gradually introduced, depending on your pension scheme - 2% rising to 8%.

Can I postpone auto enrolment?

An employer can choose to postpone auto enrolment for up to three months from certain dates. One reason you might consider postponing is if you have staff members who you know will stop working for you within three months. You could also use it to align auto enrolment with other business processes. You can only postpone automatic enrolment from:

•     Your staging date
•     A staff member’s first day of employment
•     The date a staff member first becomes eligible for automatic enrolment.

Remember, if you postpone your auto enrolment, it doesn’t change the staging date itself. You must write to tell the staff who will be postponed within one month of your staging date.