Workplace Pension Reform and Auto Enrolment

Auto Enrolment is the government’s – and it stems from governments of differing political hues – attempt to increase participation in workplace pension arrangements in order to reduce the burden on the state as the balance between workers and those in retirement changes.

Auto Enrolment requires employers to enrol eligible employees into a workplace pension, unless the employee opts out. The employer cannot force an employee to opt out.

Once enrolled, there is normally an obligation for both employer and employee to contribute to the pension. Confusingly some of the writing on the topic refers to a “government contribution” – alas this isn’t in cash, just tax relief.

The process is overseen, and regulated by, The Pensions Regulator (TPR).

Who has to be enrolled
Opting out
Other obligations
Staging dates
Implementation Practicalities for Whitefield clients
Existing Pension Arrangements
Further guidance

Who has to be enrolled?

“Eligible job holders” – over 22 and younger than state pension age, and earning over £10,000 pa. These staff members have to be enrolled. The employer will need to deduct employee contributions from their salary, and make the employers contribution on top.

“Non eligible job holders” – not otherwise an “eligible job holder” (above) and, between 16 and 74, and earning over the NI threshold (currently £6,163 per year 2019/20); in practice this means either (i) those aged 22 to state pension age and earning more than NI threshold but less than £10,000 or (ii) those between 16 and 21 or state pension age to 74 and earning over £10,000 (and thus not “eligible job holders” by virtue of their age). These workers have to be given a choice about opting in, and if they do then the employer will need to deduct employee contributions from their salary, and make the employers contribution on top.

“Entitled job holders” – aged 16 to 74 and earning less than amount the lower NI threshold (currently £6,136per year 2019/20).   Have a right to join an employers pension scheme and have deductions from their salary, but the employer doesn’t have to make employers contributions.

Opting out

Employers cannot opt out, but employees can.   However the employer has an obligation to re-enrol anyone who opts out, after three years, although the employee can opt out again.

Employers cannot coerce employees to opt out.


  • Before 30 September 2018 – employer 1%, employee 1%
  • 6 April 2018 to 5 April 2019  – employer 2% – employee 3%
  • 6 April 2019 onwards – employer 3%, employee 5%

Other obligations

Employers will need to:

  • register with The Pensions Regulator
  • select a low charging pension scheme which complies with TPR rules (in most cases the Government sponsored NEST, but there are private alternatives)
  • give information to employees
  • enrol or auto enrol as appropriate
  • pay deductions and employer contributions to pension company
  • re-enrol after three years anyone opting out
  • assess changes in the work force, eg people whose pay level or age changes, which changes their categorisation between eligible, non eligible and entitled, and enrol those coming into the system
  • complete a declaration of compliance with TPR no later than five months after staging date



Remember that one person companies are employers, and directors or secretaries who receive a salary or fee are employees – conversely being a shareholder and receiving dividends doesn’t render someone an employee – the difference is between earned income (pay, wages, salary, directors fee, etc) and unearned income ( dividends ).

There are very few exemptions and notably Auto Enrolment needs to operate even if you only have one staff member, for example a sole trader plumber with one assistant or a builder paying their spouse over the NI limit as secretary.

However the following exemptions do exist:

  • Office holders (directors and secretaries) who do not have a contract of employment – that is to say and fee/wage/salary is paid for their services as an officer not as an employee – this will be the vast majority of officers.  This is an important exemption for our PSC and small company clients, however if there are any other employees who are not officers (director / secretary), even a spouse who has a £100 a month salary for admin, then the exemption fails.

There is a bit more on exemptions here (but this was written before guidance was confirmed):


TPRs guidance on exemptions for officers is at:


Staging dates

Staging date is the term for when employers have to start operating Auto Enrolment.

For businesses first employing someone after October 2017, the staging date is when the first member of staff is engaged.

Implementation practicalities for Whitefield clients – this information is now historic as existing businesses will now all be in the regime

Auto Enrolment will apply, potentially to:

  • One person companies, eg personal service companies and very small owner only limited companies
  • Companies, sole traders and partnerships with employees (other than the officers of a company)

For ease we are stratifying our clients into categories:

A – Employers (company, sole trader or partnership) who look after their own payroll.

Where requested we can assist with planning Auto Enrolment, TPR registration, TPR declaration of compliance, and possibly elsewhere, but the responsibility for compliance rests with the payroll function of the employer.

B – Employers (limited company, sole trader or partnership) where we look after the payroll.

We will need to help you:

      • understand staging date
      • identify staff to be enrolled
      • register you with TPR, including nomination of pension scheme
      • declaration of compliance
      • ongoing administration including deductions and opt outs and ins

There will be an impact on existing payroll costs, which we will discuss with clients on a case by case basis.

C – Small limited companies (including PSCs) – with the only people on the payroll being officers.

We assume that you will want to claim exemption from the regime, but we will take your instructions.

Subject to your confirmation we can arrange to notify TPR of your opt out by email.

This doesn’t prevent you making other pension arrangements via your company or personally.

We have a form for existing clients to instruct us to assist with Auto Enrolment.

Existing Pension Arrangements

Pension Schemes used for Auto Enrolment have to meet certain criteria relating to governance, cost and accessibility.

Employers: if you already offer a pension scheme to external staff, you will need to take advice from the scheme manager or a Financial Advisor as to whether your existing scheme is Auto Enrolment compliant.

Directors/Officers: if you are making employer contributions to a Personal Pension, SIPP, SSAS or similar then these are unaffected by, but potentially additional to, Auto Enrolment.  You can continue with these arrangements but if your company falls into one of the categories (A or B above) where TPR registration is compulsory, you will need to Opt Out of Auto Enrolment from your business payroll in respect of your own salary.   If you wanted to merge your existing pensions into a low cost/easy access Auto Enrolment scheme, rather than continue them separately, then you will need to take advice from a Financial Advisor.

Further Guidance

Detailed guidance on Workplace Pension obligations can be found on The Pension Regulators Website

To see the staging date for your business – when you have to start workplace pensions – see the table of staging points

There are other workplace pension stories and comment on our site: see them all here