Understanding automatic enrolment in workplace pensions
How to prepare for automatic enrolment in a pension scheme depending on your role at the University.
Government Pension Reform seeks to increase pension scheme membership and 'auto-enrolment' legislation has been introduced to deliver this. All UK employers must comply with this legislation and the University's last staging date was 1 May 2016.
This new law means that every employer must automatically enrol workers into a workplace pension scheme if they:
- are aged between 22 and State Pension age
- earn more than £10,000 a year
- work mainly in the UK
Staff who meet these criteria are known 'Eligible Job Holders' (EJHs).
How auto-enrolment will affect you depends on your employment situation at the University. To help clarify the changes we have written short guides for different types of University staff:
- Hourly paid workers and External Examiners
- Staff members with contractual (fixed) hours
- Variable Hour Teaching Fellows
If, after reading these, you still have questions please contact Johanna Brownlow or email email@example.com.
Further information can also be found on The Pensions Advisory Service website.
Hourly-paid workers and external examiners
Entitlement to join a scheme
With effect from 1 May 2016, any Hourly paid worker or external examiner can choose to join the People’s Pension by completing an application form. If you do not choose to join the People’s Pension but you meet the EJH criteria in one month then the University will postpone your enrollment for a further three months. If on this third month you again meet the EJH criteria you will then be automatically enrolled into the People’s Pension. The University will write to you when you are postponed, explaining what will happen.
If you are automatically enrolled into the People’s Pension then you can decide to opt-out. The People’s Pension will send a welcome pack to your home address and this will contain details of how to opt-out.
If you opt-out within the deadline stated in your welcome pack then a refund of any contributions will be made via the Payroll.
If you opt-out after this date then you will not receive a refund of contributions but instead you will have a period of service with the People’s Pension.
The People's Pension will send you a welcome pack which will contain all the information you require including how to opt-out. It is therefore important that you keep the University updated with your home address as the welcome pack will be sent to you by post. You will also see a deduction for the People’s Pension on your payslip.
Minimum contributions are set by the Pension Regulator and are only payable on earnings over £503 per month. Your contributions will start at % and will rise to 5% by April 2019. In addition, contributions from the University will start at 2% and rise to 3% by April 2019.
Prepare for auto-enrolment
Ensure your timesheets are submitted on a regular basis so there is no build-up of payments due to you. You should also ensure your home mailing address is correct.
Changing your address
You should log into Employee Self Service and update your home address.
Leaving the University
When you leave the University, contributions to the People’s Pension will stop. You can either leave your money with them or if you are paying into another pension scheme you could ask the People’s Pension to transfer your money into this.
Find more information about the People's Pension
Staff with contractual (fixed) hours
Auto-enrolment will have no impact on you while you remain in a pension scheme and employed by the University if you are already in a pension scheme.
If on 1 May 2016 you met the criteria of an Eligible Job Holder (EJH) you would have been automatically enrolled and you would have decide either to remain in the scheme or opt out.
If on 1 May you were not in scheme and did not meet the criteria of an EJH, because perhaps you were too young or your earnings (including overtime were not sufficient) then the University will assess you each month. If one month you meet the EJH criteria then you will automatically enrolled into the scheme appropriate to the grade of your position, as per the following table.
|Grade of position||Pension scheme|
|Academic||University Superannuation Scheme (USS)|
|Grade 6-9||University Superannuation Scheme (USS)|
|Grade 1-5||Local Government Pension Scheme (LGPS)|
The University has to auto-enrol all staff who meet the criteria, however you can chose to opt-out of the pension scheme, but you cannot do this in advance. Once you have been automatically enrolled, you will need to obtain an opt-out form from the pension scheme provider, complete it and return it to the University’s Pension Office.
Rejoining a scheme
You can opt in and out at any time, but if you opt-out you will be automatically enrolled into the scheme every three years. This gives you an opportunity to reconsider your decision.
Change of employer
If you meet the earnings and age criteria your new employer will auto-enrol you into their workplace pension scheme. You may be able to transfer your current pension pot into your new pension, but you would need to check this with your new employer.
Leaving the country
If you leave the country and start contributing to a pension through your new employer you might be able to transfer your pension to your new pension provider, but this will depend on the rules of your pension scheme provider.
Read further information:
Part-time and variable-hour teaching fellows
Part-time or variable hour teaching fellows are entitled to join a pension scheme. You can elect to join USS at any time. You must make this decision and inform the University Pensions Office that you want to join.
If from the 1 May 2016 you are not a member of USS but you meet the EJH criteria, the University will postpone your automatic enrollment for three months. If on this second date you again meet the EJH criteria you will then be automatically enrolled into USS from this date.
Contributions to USS are 9.6% of your monthly earnings. In addition, the University pays a further 18%.
Criteria for enrolment
The University will have assessed you and automatically enrolled you, you will see USS pension contributions deducted from your pay. You will then be sent a USS membership certificate and details of scheme.
If you have been auto-enrolled and you do not want to stay in the scheme then you need to obtain an USS opt-out form. If you opt out within three months of joining then a refund of these contributions can be made via the Payroll, if not then you will have a small period of service in USS.
Under the legislation it is not possible to opt-out in advance of being auto-enrolled. However, the quicker you act the sooner any contributions will be refunded to you via the payroll.
Preparing for auto-enrolment
You can ensure timesheets are submitted on a regular basis so that there is no build-up of payments due to you. You should also ensure your home mailing address, held in iTrent (Employee Self Service), is correct and up-to-date.
Read more information about the Universities Superannuation Scheme.