Auto Enrolment – do you know your legal obligations?
Auto-enrolment requires all UK employers, including churches and charities, to provide their staff with a pension scheme that meets the Government standard.
Page contents
The Pensions Regulator
Who do I need to put in a pension scheme?
Can I use a Church of England Pension Scheme?
Are there other schemes we can use?
Do I need to write to staff?
Can I delay enrolling staff?
Is salary sacrifice allowed?
What if I only employ ‘non-eligible’?
What if I only employ ‘entitled’ staff?
What if ‘eligible’ staff later become ‘non-eligible’ or ‘entitled’ staff?
What about part-time staff?
What about staff on zero hour contracts?
What if pension contributions are covered by the Diocese or another organisation?
What if we are not a registered company?
Need to talk to someone?
The Pensions Regulator
The Pensions Regulator has a useful guide to help you through the process of automatic enrolment. You can find this at www.thepensionsregulator.gov.uk/en/employers
The guide covers:
• What is automatic enrolment?
• Do I have to write to staff?
• Which staff must I enrol?
• What are the costs?
• What pension scheme must I use?
• What to do after staff are enrolled
• Opt outs and opt ins
Who do I need to put into a pension scheme?
Your employees will fall into one of two categories:
Type 1: staff who must be put into a pension scheme. You must pay into it
Type 2: staff who don’t need to be put into a pension scheme, but who can ask to be entered
You can find out which employees fall into which category via The Pensions Regulator: Assessing your staff.
Can we use a Church of England pension scheme?
Yes, providing you are associated with the Church of England, the Pensions Board have a number of pension schemes you can use. The most suitable scheme is likely to be Pension Builder 2014 (PB 2014). You can find further information at www.churchofengland.org/pb2014
PB 2014 is different from the usual “defined contribution” pensions offered by mainstream providers. It provides valuable guarantees to members pots and automatic life cover. But, it may not be suitable for everyone.
Staff at the Pensions Board will be happy to explain how PB 2014 works, and help you decide whether it is the right pension scheme for you to use. You can contact them:
By phone: 020 7898 1802
By email: pensions@churchofengland.org
Are there other schemes we can use?
Yes, there are other mainstream providers you can use. National Employment Savings Trust (NEST) is the Government backed automatic enrolment pension scheme and will accept any employer that applies to them. You can find more information at www.nestpensions.org.uk.
There are also other providers that may be able to help such as The People’s Pensions.
Do I need to write to staff?
Yes. You need to write to them and let them know whether they will be automatically enrolled and how they can opt out if they want to. You can find template letters at www.thepensionsregulator.gov.uk/en/employers
Can I delay enrolling staff?
Yes, you can postpone enrolling staff for up to 3 months. For example, if you have a probationary period of 6 months you still have to enrol them after 3 months.
Is salary sacrifice allowed?
Most pension schemes allow this, but there are points you should consider first. Discuss this with you pension provider for more information.
What if I only employ ‘non-eligible’?
Staff can ask to ‘opt in’ and if they do, you need to have a qualifying pension scheme for them to join. There is no need to have a pension scheme set up in advance, but you may want to have back up arrangements in place in case someone opts in.
What if I only employ ‘entitled’ staff?
These staff have the right to join a pension scheme, this must be a tax-registered pension scheme, and you must write to staff to let them know that they can join.
For information on employer pension contributions and funding see the guidance provided by The Pensions Regulator.
If you do not wish to pay contributions, you cannot use PB 2014, but you can approach NEST.
You need to write to these staff to let them know they can join a pension scheme.
What if ‘eligible’ staff later become ‘non-eligible’ or ‘entitled’ staff?
If an eligible staff member later reduces their hours or pay and becomes a non-eligible or entitled staff member they must remain in the pension scheme, unless they decide to opt-out.
What about part-time staff?
Part-time staff are treated the same as full- time staff. If someone who is part-time has another job their other employer will also consider them for automatic enrolment.
What about staff on zero hour contracts?
You need to carefully assess staff on zero hour contracts. This guidance can help you decide whether you need to automatically enrol them: Assessing your staff.
What if pension contributions are covered by the diocese or another organisation?
If the diocese is happy to include the person in their own pension scheme and pay contributions on their behalf, this should be formally agreed and documented.
If the person will be enrolled in the Church organisation’s scheme but the diocese will pay the contributions, check with your chosen pension scheme this is possible.
What if we are not a registered company?
This may be the case if you do not employ anyone who earns above the Lower Earnings Limit.
Automatic enrolment will start when you first pay PAYE income (i.e. income above the Lower Earnings Limit). However, staff can ask to join a pension scheme.
Need to talk to someone?
If you would like to speak to somebody at the Pensions Board then they will be happy to explain how PB 2014 works, and help you decide whether it is the right pension scheme for you to use.
Their contact details are:
By phone: 020 7898 1802
By email: pensions@churchofengland.org
Last updated July 2024