Pension auto enrolment rules and what if your firm breaks them
My son’s new employer has no pension, what can he do? Steve Webb explains the rules for auto-enrolling staff and what to do if your company breaks these rules
My son is very happy with his new job, but they do not offer a workplace pension. What options does he have?
SCROLL DOWN TO FIND OUT HOW TO ASK STEVE YOUR PENSION QUESTION
Pension rules: New employer son has no scheme so how should he arrange this
Steve Webb replies: Your son’s employer may be in breach of its legal duty to enroll eligible employees in an occupational pension, although there may be valid reasons why he has not yet been enrolled.
Let me run through how the system works and then explain what your son can do if he does go wrong.
The basic principle is that employers are required by law to enroll ‘qualifying employees’ for an occupational pension.
The exact legal requirements for automatic registration are on the Pension Regulator’s website, but in simple terms, the main points are:
– The duty concerns employees, but not the self-employed;
– The obligation to register a pension applies to employees between the ages of 22 and the state pension age; those aged 18-21 and 66-74 are not required to be enrolled, but may choose to; this means they can tell their employer that they want to be part of a company pension (with an employer contribution) and the employer must make the necessary arrangements;
Did you miss out on an AOW benefit if you were a widower?
This is Money columnist Steve Webb is urging elderly widows who may have missed a back payment when their husbands died to get in touch.
He wants to help people get money that is rightfully theirs, and find out if there’s a systemic problem that hasn’t been picked up in the government’s massive correction exercise for older women who were underpaid.
Find out if you may be affected and how to contact Steve here.
> Will you miss out on AOW if you became a widow on retirement?
– You only need to be enrolled if you earn £10,000 a year or more; if you earn between £6,240 and £10,000 you don’t need to be enrolled, but you do have the legal right to apply;
– Broadly speaking, the employer does not have to register you the moment you walk through the front door (and I note your reference to your son’s ‘new’ job), but the employer must do this within about three months of you started working for them.
If your son ticks all of these boxes but is not enrolled in a pension, he should talk to his employer first.
It may be that there is a genuine misunderstanding or that the employer is not aware of these legal obligations.
Hopefully, they will fulfill their obligations (including paying any missing dues) once brought to their attention.
Please note that in this case your son will be expected to pay back his own contributions as well
Unfortunately, however, there are significant rates of non-compliance with these rights, especially among the smallest companies.
In the six months to December 2022, the Pensions Authority says it has issued more than 28,000 “compliance orders” requiring companies to comply with their auto-enrollment obligations, as well as more than 18,000 “fixed fines” that companies have failed to comply with.
If the employer does not want to comply with this, it may be necessary to warn the Pension Supervisor, who can then take enforcement action.
I understand this can be difficult, but you can do it report employers who violate auto-enrollment rules anonymously.
Let me know how your son is doing.