The pension journey

From assessing your employees to processing contributions, we’re with you every step of the way. The NOW: Pensions Trust (the ‘Scheme’) is set up to make your employees’ pension journey as easy as possible for them – and for you.

Step 1: Auto enrolment assessment

You need to assess all your employees so you know which ones are eligible to be auto enrolled.

You must auto enrol eligible employees. Even if they’ve said they don’t want to join the Scheme, you’re required by law to enrol them and give them the option to opt out.

Use your payroll

We recommend you assess your employees through your payroll. That way there’s no need to wait for any information to be supplied from an outside organisation – it should all be in your payroll.

Assessment question 1 – age

You may need to auto enrol them.

State Pension age can be hard to tell as different people have different State Pension ages. You’ll need to check the employee’s date of birth and use the State Pension age calculator on the government website to find out their State Pension age.

You don’t need to auto enrol them, but they can ask to join the Scheme. If they do, you’ll need to put them in and pay contributions to their pension savings.

If they’re under 22 you may have to auto enrol them in the future if they meet the age and earnings criteria.

Assessment question 2 – earnings

The employee is an eligible jobholder. You’ll need to auto enrol them and pay contributions towards their pension savings.

If your employee is aged 16-74 and earns less than the auto enrolment threshold salary (currently £10,000 a year) but more than the lower limit for qualifying earnings (£6,240 in 2021-2022) they are a non-eligible jobholder.

You don’t need to auto enrol them, but they can ask to join your Scheme. You’ll need to put them in and pay contributions to their pension savings.

You may need to auto enrol them in the future if they meet the age and earnings criteria.

If your employee is aged 16-74 and earns less than the lower limit for qualifying earnings (£6,240 in 2021-2022) they’re an entitled worker.

You don’t need to auto enrol them, but if they ask to join you must put them into a pension scheme. Unless you have alternative pension arrangements for entitled workers, you’ll need to put them into the Scheme. Our Scheme requires you to pay contributions towards their pension savings (even though this isn’t a legal requirement).

You may need to auto enrol them in the future if they meet the age and earnings criteria.

Assessing your employees at a glance

Type of employee Eligible jobholder Non-eligible jobholder Entitled worker
Age 22-State Pension age 16-74 16-74
Earns £10,000+ £6,240-£10,000 Below £6,240
Auto enrolment status Must be auto enrolled Can ask to join Can ask to join
Employer contribution status Employer contributions required Employer contributions required Employer contributions are required under the Rules of our Scheme

Step 2: Enrolment

You’ll need to set up your payroll function to deduct contributions from your eligible employees’ pay each month.

If you’ve chosen Scheme tier (contribution model) 101 (the minimum contribution level based on qualifying earnings):

  • the deduction is 5% of employees’ qualifying earnings, and
  • you’ll add 3% to bring the total up to 8%.

If you’ve chosen a different Scheme tier (contribution model), or more than one, you’ll need to set up your payroll function to deduct the correct contributions each month.

To ensure the money is credited to members’ accounts promptly, you must pay the contributions into our Scheme on or before the 22nd of the month following the deduction date. There are penalties for late payments.

We recommend using Direct Debit to transfer contributions quickly and easily.

 

Step 3: Records

We need accurate records so we can check members’ contributions are being collected and invested correctly. You’ll need to upload details of the contributions you’ve collected through your payroll to our system.

Step 4: Employee communications

You must tell your employees they’ve been auto enrolled and what this means for them. If you’re using our Scheme as your workplace pension, we can do this for you and ensure you’re fulfilling your legal obligations.

Taking care of your employee communications

Step 5: Declaration

The final step of auto enrolment is to declare to The Pensions Regulator (TPR) that you’ve met your auto enrolment duties. You must do this within five months of your workplace pension’s start date.

You can make your declaration online at TPR’s website. TPR has produced a checklist with all the information you need to give and where you can find it.

 

Step 6: Opt-outs

In each pay period you’ll need to check whether any employees have opted out within a month of being enrolled. To do this, you’ll need to download an employee action file from Gateway before you run the next payroll.

If any employees have opted out within the one-month deadline, you’ll need to refund their contributions.

You must not encourage employees to opt out, or suggest they’ll get some sort of reward if they do. This is known as ‘inducement’ and is illegal.

 

Step 7: Ongoing assessment

In each pay period you will need to re-assess employees who haven’t previously been auto enrolled to check whether they now meet the auto enrolment criteria.

If they do, you’ll need to auto enrol them.

 

Step 8: Checking for changes

Before you process each future payroll, you’ll need to download an employee action file to check whether there have been any changes since the last payroll run. This could include employees:

  • opting out
  • opting in, or
  • requesting a change in their contribution rate.

 

Step 9: Re-enrolling employees who have opted out

Every three years you’ll need to re-assess your employees who have opted out of the Scheme, and re-enrol them if they’re still eligible.

Learn more on our ‘Re-enrolment – what you need to know‘ page.